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It would also make it impossible for many mini-mills to survive, the Japan Iron and Steel Federation has warned.
If the government presses ahead with its planned phase-out of all existing nuclear power plants by the 2030s, the added cost in higher electricity charges would be equivalent to three times the average electric arc furnace operator’s pre-tax profit, making it impossible for them to stay in business.
The result would be the loss of at least 20,000 jobs in the industry, the JISF claims.
It said that the cost to the Japanese industry as a whole would be some ¥3 trillion ($38 billion), the equivalent of doubling the corporate tax rate.
It urged the government to look at the issue in a “responsible” manner given the critical need for Japanese industry to have access to stable and low-cost energy.
But the JISF’s worry is not just the direct impact on steelmakers themselves, but also the impact on their customers.
It takes ¥10,000 worth of electricity on average to build a car in Japan. With manufacturing already buckling under the weight of a strong yen and high taxes, “an affordable and stable supply of electricity is necessary to prevent the hollowing out (of industry)”, the Japan Automobile Manufacturers Assn has warned.