Nippon Steel, Japan’s largest steel maker, announced a sharp cut in domestic production.

The Nippon Steel is going to close the steel plant, Kure Works in Hiroshima Prefecture, western Japan

Currently, there are about 3,300 workers at the steel plant. Nippon Steel said it would also leave a blast furnace idle at the Wakayama plant.

The company said the plan would reduce its annual capacity by 5 million tons and reduce revenue by about $ 1 billion. 5 million tons account for about 10% of its total production capacity in Japan.

Executive Vice President Akita Migita said the company expects the domestic market to shrink and global competition to accelerate. He said looking forward, Nippon Steel proposed the plan after assessing the current high production capacity.

By integrating production and reducing fixed costs through more cost-competitive facilities, Nippon Steel expects to save approximately 100 billion yen annually.

“Chinese producers have excess capacity,” Akio Akita, executive vice president in charge of corporate planning, said at a press conference on Friday. “Their products are now being consumed domestically, but once China’s growth slows and these products flow into the global market, we will face more intense competition.”

Unlike The Main Factor Affecting Global Nickel Prices In 2020 Is Indonesia ’s Supply Changes in Indonesia, Nippon Steel has not included a coronavirus outbreak in its latest forecast because its full impact is not yet known. It is expected to have some impact on demand and its logistics chain.

The steelmaker also lowered its revenue and net profit forecasts for the full year to March. The company expects a net loss of 440 billion yen (approximately $ 4 billion, 28.1 billion yuan), compared to a previous net profit of 40 billion yen.