Japan’s Nippon Steel plans to increase its production in countries like India and the US while lowering output domestically, due to higher steel demand from these nations.
The firm shut 10pc of its Japanese production early this year, before the COVID-19 pandemic, due to competition from China and sunken demand at home. The domestic automotive industry’s steel consumption also seems to be declining, the steelmaker noted in a recent release. In fact, Nippon’s vice president Katsuhiro Miyamoto recently told the media that steel demand is expected to fall to 2019 levels. Instead, Nippon plans to focus on its overseas ventures.
Nippon Steel and Arcelor Mittal’s joint venture, ArcelorMittal Nippon Steel India, was formed after jointly buying India’s Essar Steel at a 9.6mn mt output capacity in 2019. The firm now plans to expand production capacity to around 12mn mt to 15mn mt moving forward, as well as raising the venture’s pellet production, Miyamoto added.
The Japanese steelmaker also plans to partner with ArcelorMittal at its Calvert, Alabama plant (which did not transition to Cleveland-Cliffs) to build a new electric arc furnace in the US with an annual capacity of 1.5mn mt which will help with shorter lead times and lower inventory levels. In the first half of the year, the firm reported a loss of JPY106.5bn ($1bn) and 14.6mn mt in crude steel production.
($1 = JPY104.06)