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TOKYO (Reuters) – Japan's biggest steel maker, Nippon Steel & Sumitomo Metal, wants to boost crude steel production to nearly 11 million tons a quarter from April 1, after system problems have reduced production and its prospects profit this year, said a senior executive.
FILE PHOTO – The logo of the Kimitsu steelworks at Nippon Steel and Sumitomo Metal Corp. is represented in its exhibition hall located in Kimitsu, Chiba Prefecture, Japan on May 31, 2018. REUTERS / Kim Kyung-Hoon / Photo File
"We should be able to produce 11 million tons of crude steel per quarter, but actual production has not been up to the recent years," said Nippon's executive vice president on Friday. Steel, Katsuhiro Miyamoto, Reuters.
The estimated average quarterly production for the year ended March 31 is 10.3 million tonnes.
"We plan to increase our crude steel production next year starting this year, which will be a key factor to boost our profits," said Miyamoto.
Earlier this month, the third largest steel producer in the world for crude steel production, warned that its annual profit for the 2018/19 fiscal year would be 6% lower than previously forecast, because of a decline in crude steel production.
The technical problems in his factories, particularly in Oita and Wakayama, in western Japan, are due to mixed factors, he said, citing a lower quality of raw materials, aging facilities and heavier constraints on its systems for the processing of harder and more advanced products, such as steels.
To address this problem, Nippon Steel performed routine maintenance more often and began operating a new blast furnace in Wakayama this month, replacing a 31-year-old blast furnace, which was the oldest blast furnace. operating in the world.
"The Oita is up and running again as the new Wakayama furnace is about to ramp up," said Miyamoto.
Japanese steelmakers are benefiting from strong domestic demand from carmakers and the construction sector, which handles many projects for the Tokyo 2020 Olympic Games. But natural disasters and the problems that prevented them to produce as much steel as they had expected.
In addition, steelmakers around the world are facing higher prices for iron ore after a tailings dam at a Vale-owned mine has claimed the lives of 300 people at the worst mining disaster in Brazil.
"We badume that things will stabilize after the other types of tailings dams used in other mines are recognized as safe," said Miyamoto, without specifying a timetable.
Nippon Steel, which buys about 30 percent of its iron ore in Brazil, has found no impact on its purchases in terms of volume, he said, although rising prices remain a concern .
He expects prices to gradually recover their stability.
"Vale is able to increase production, like other mines in northern Brazil, and other miners can also increase production," he said.
Report by Yuka Obayashi; Edited by Tom Hogue
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