TOKYO, Dec 25: World number-three steelmaker JFE Steel Co stepped up planned output cuts on Thursday in the face of plunging demand and became the first Japanese player to shut a blast furnace as the downturn bites.

JFE said output in the six months to March would now be cut by a quarter from the preceding half year as demand from automakers and other customers plunges.

The announcement came as the Japanese government on Thursday unveiled a severe steel market outlook for the January-March quarter, forecasting a 32 per cent year-to-year fall in the nations’ crude steel output, the biggest ever, and to a level that is the lowest in 40 years.

The Ministry of Economy, Trade and Industry (METI) said steel consumption would fall across-the-board during the three months, with autos and industrial machines hit particularly hard -- down 40 per cent and 25 per cent, respectively.

“Demand is declining, while inventories are building up.

We expect severe market conditions to continue at least until after the April-June quarter,” a METI official told a news conference.

JFE Steel, a core steel unit of JFE Holdings, has been hit as key clients Toyota Motor Corp and other Japanese carmakers curtail their own output while the global economic slump batters consumer spending.

Toyota expects its first-ever annual operating loss for the year ending in March.

JFE said it would idle one of its nine blast furnaces from mid-January until demand recovers. No job cuts are planned related to the closure of the furnace at its West Japan Works Plant in Okayama prefecture in western Japan.—Reuters