The Sumitomo Metal Industry coporation, which is Japan’s third largest steelmaker, has announced that it will suffer a £445 million loss for the year ending March 31st, due in large part to the devestating earthquake and tsunami that struck the country.

Its Kashima plant, which produced 8.3 million tonnes of steel per year, has suffered extensive damage to blast furnaces, ports, cranes and gas holders. This has severely affected the plant’s output, which in turn means that the company are unable to ship out as much steel.

The plant accounts for 60% of the company’s crude steel output, but is currently operating at 50% capacity, despite the fact that the two damaged blast furnaces are now back online.

Sumitomo Metal plans to merge with Nippon Steel Corp , the world’s No.4 steelmaker, by October 2012.

“The quake has no impact on our merger talks,” claim the company.