Japan's crude steel production capacity could be cut by 20 percent because of damage to key steel mills in Friday's earthquake and tsunami.
A sustained fall in output would threaten a wide range of industries including the car industry, which has a vital role in Japan's economy.
Operations at four steel mills in Iwate, Miyagi and Ibaraki prefectures have been disrupted.
Three other steel plants in Chiba and Kanagawa prefectures would suffer from power shortages due to damage to Tokyo Electric Power Co.'s power stations that has forced it to introduce rolling power cuts.
In a news conference in Osaka on Monday, March 14, organized by the Kansai Economic Federation, Sumitomo Metal Industries Ltd. Chairman Hiroshi Shimozuma said his company's flagship plant in Kashima, Ibaraki Prefecture, had been seriously damaged.
"The blast furnaces, converter and hot-rolling equipment at the mill have all been crippled," said Shimozuma.
The blast furnace, where coke and iron ore are heated to produce pig iron, is central to the production process at any integrated steel mill. Pig iron is the basic raw material used in the production of commercial iron and steel.
Shimozuma said the blast furnaces at the plant were not working. The converter, which is used to remove carbon from pig iron, and the hot-rolling equipment, which processes steel materials into sheets and rods of steel, have also been badly damaged.
Port facilities used to ship steel from the plant and to bring in raw materials have also been damaged. Repairing the cracks and subsidence damage at the facilities could take more than six months.
The 1995 earthquake that ravaged the city of Kobe stopped a blast furnace operated by Kobe Steel Ltd., causing its contents to cool down and solidify. It took two and a half months for the steelmaker to bring the furnace back into operation.
Sumitomo Metal Industries plans to start putting air into the two blast furnaces at the Kashima mill as early as Saturday in an effort to maintain the temperature inside the furnaces and prevent the molten pig iron from solidifying.
The two blast furnaces at the Kashima plant account for about half of Sumitomo Metal Industries' normal crude steel production capacity of 14.3 million tons per year.
The Kashima site also houses several vital processing facilities. Some of its products cannot be manufactured at the company's plants in Wakayama and Kita-Kyushu.
Sumitomo Metal supplies steel sheets to major automakers, including Mazda Motor Corp. and Toyota Motor Corp. Some customers are already trying to look for other suppliers.
Nippon Steel Corp.'s plant in Kamaishi, Iwate Prefecture, is also out of service. It was partially submerged by the tsunami. It is not clear when the plant will come back on stream.
Nippon Steel controls half of the domestic market for wire rods used in making steel cords to reinforce tires. The Kamaishi plant was the company's main manufacturing facility for wire rods.
JFE Bars and Shapes Corp., a subsidiary of JFE Steel Corp. which operates mini-mills using electric furnaces, has also been hit. Two of its three mills, one in Sendai and the other in Kamisu, Ibaraki Prefecture, have been crippled by the quake. Among other products, the plants produce gears and other parts for the auto industry.
Because of uncertainty about the supply of parts, many of Japan's car manufacturers have decided to suspend production from Tuesday. As well as trying to repair damaged facilities in the battered Tohoku region, automakers are also struggling to deal with rolling blackouts in the area around Tokyo.
(This article was written by Takashi Fukuyama, Satoshi Seii and Yukio Hashimoto.)
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