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Overview
The earthquake and tsunami caused widespread damage in Japan, inflicting heavy damage to roads, railways, ports, and industry infrastructure. These natural disasters also led to the outbreak of several fires and the collapse of a dam.
Affected Steelmakers
The earthquake and the tsunami forced some Japanese steelmakers to temporarily suspend operations on March 11. However, by March 13, many of these steelmakers resumed operations.
Nippon Steels Kimitsu unit was temporarily shut down The tsunami led to flooding in the Fukushima Nuclear for inspection.Two out of its three furnaces were restarted power plant, causing the failure of emergency reactors following the inspection. Nippon Steel announced that needed to run pumps that cool the reactors. As a result, the operations of its Kimitsu unit have been restored to a series of accidents have occurred in the plant, including pre-earthquake levels. The Kimitsu unit produced 5.9 hydrogen explosions, which destroyed the outer building million tons of crude steel in 2010. of reactors 1, 3, and 4, caused partial nuclear meltdowns A fire broke out in JFE Steels Keihin unit but has since in reactors 1, 2, and 3, and fuelled a fire in reactor 4. been extinguished. JFE Steels blast furnaces at its Keihin Due to radiation leakage, a 30 km evacuation zone was and Chiba units were banked initially and operations enforced around the plant. were suspended. However, the blast furnaces have started operating normally. Sumitomo Metal Industries Limiteds coke oven gas storage unit in Kashima, Ibaragi caught fire on March 11. The fire was extinguished by the next day, March 12. The units two blast furnaces were blanked indefinitely and were inspected for damage. One of the furnaces was restarted on March 20; however, the second furnace is expected to take several days for operations to resume. The Kashima unit produced 5.7 million metric tons of crude steel in 2010. Tokyo Steel announced that it will restart its operations only after confirming that all of its facilities have not incurred any damage. The Kanto plain region contains 18 electric steel producers, including Tokyo Steel Manufacturing, Godo Steel, and Country Snapshot Japan is the worlds second largest steel producing Kanto Steel. The Kanto region accounts for 400,000 country. Its production totaled 109 million metric tons metric tons of crude steel per month. The downstream industry for this production is mainly construction. of steel in 2010. J apan is among the worlds top three iron ore importers. Electric steel mills have been affected by the power The country accounted for about 12.8% of global iron rationing implemented by Tokyo Electric Power. The production of these mills is expected to fall due to the ore shipments in 2010. power restrictions. Japan was the second largest exporter of steel in Asia Itoh Steels mini mill at Ishinomaki produces 200,000 in 2010. It exported 43 million metric tons of steel. metric tons of steel a year, and Tokyo Tekkos mill in Japans five major steel producers account for about Hachinohe produces 170,000 metric tons per year. Both 80% of the countrys steel production capacity. Most of these mills were flooded. of their production bases are located near the Tokyo Bay, Osaka Bay, and Hakata Bay. J apan is home to the worlds second largest and sixth largest steelmakers and has an installed capacity of 132.4 million tons.
The reconstruction of infrastructure in Japan will require a huge quantity of steel. Once the reconstruction process begins, much of the steel produced in Japan is expected to be directed towards reconstruction efforts. As a direct consequence, steel exports from Japan will decrease. The void which is expected to be left by the decrease in Japanese steel exports is likely to be filled by South Korean and Chinese steelmakers. South Koreas POSCO has already been requested by South Koreas leading ship makers to increase its production of steel by 600,000 metric tons to mitigate the risk of supply disruptions from Japan.
Conclusion
The substantial overcapacity in the Chinese steel industry, which has a surplus of 100 million metric tons, along with the excess capacity of South Korea will compensate for the potential decline in Japanese steel exports. In the short term, the import of steel products for the reconstruction of infrastructure is expected to increase in Japan. However, Japans steel capacity is expected to suffice and meet domestic demand in the medium term.
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