Taiheiyo Cement Corp. has lowered domestic cement output because of rising production costs stemming from a jump in prices of coal, the main fuel used in making cement. Coupled with a price hike of 300 yen per ton from April shipments, the firm seeks to improve its cost structure by drawing down inventory through the output reduction.
A cement kiln at the Ofunato plant in Iwate Prefecture has been offline since late July, reducing production for that month and August by 50,000 tons, or 20%, from previous plans. An extension in the production cut period and a reduction of output at other domestic facilities are also under consideration.
China’s demand for coal to fuel power plants has risen sharply in light of that nation’s economic growth. As a result, Chinese coal that had been allocated for export is now being diverted to domestic use, reducing the amount available for import to Japan. Coal prices, in turn, have increased 80% on the year, more than the roughly 60% rise that had been forecast.