Fire at Nippon Steel Plant May Affect Automobile Production in Japan

Tokyo, July 29 (Jiji Press)–Nippon Steel Corp. on Tuesday suspended operations at its Yawata steelworks in southwestern Japan following a fire at a coke plant, raising concerns about a possible impact on the Japanese automobile industry.

The fire broke out early Tuesday morning at Yawata Works, which is located in Kitakyushu, Fukuoka Prefecture. Japanese steelmakers are running at full capacity in order to meet brisk demand, mainly from China.

The Yawata mill produces about 4 million tons of crude steel annually, accounting for some 10 pct of Nippon Steel’s overall production. The steelworks also makes steel sheets for automobiles and electronics products, as well as railway tracks.

Nippon Steel plans to continue shipping to customers by providing products manufactured at its other steelworks. The suspension is expected to be temporary and the company hopes to resume operations early Wednesday morning, company officials said.

But worries linger that if it takes time to restore operations, automobile production in Japan may be affected.

When a gas tank exploded at the company’s Nagoya steelworks in Tokai in the central Japan prefecture of Aichi in September 2003, the subsequent halt in operations affected customers, including Toyota Motor Corp. .

Tuesday’s fire may put a damper on Nippon Steel’s earnings if the company is forced to procure coke, for which prices are surging, from outside suppliers.END

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