Japan’s crude steel industry has taken a massive hit due to the recent earthquake and tsunami, resulting in the country’s steel production capacity being cut by up to 20%.

This will likely have an effect on many steel presswork companies as demand continues to soar while supply drops off. In addition the loss will likely have huge ramifications for the Japanese economy.

Operations at four steel mills in Iwate, Miyagi and Ibaraki prefectures have been disrupted, while three other plants are set to suffer power cuts due to the rolling power cuts enforced by the Tokyo Electric Power Co.’s power stations.

Chairman of Sumitomo Metal Industries Ltd, Hiroshi Shimozuma, said his company’s flagship plant in Kashima, Ibaraki Prefecture, had been seriously damaged. He says “The blast furnaces, converter and hot-rolling equipment at the mill have all been crippled.”

The blast furnace is central to the production of a range of metals. Without it, the company’s steel production will be severely limited.