Keeping future demands in mind, Nippon Steel Corp. has decided to focus more on markets like the United States and India.
At the same time, it is reducing focus on Japan for the medium term.
The aim, according to a top-level executive of the Japanese steel company, is to capitalize on overseas profit which. At present, uptake in the global automobiles sector is largely driving that profit.
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Nippon looks overseas
News agency Reuters quoted Nippon Steel’s Executive Vice President Katsuhiro Miyamoto as saying they were looking at increasing the production capacity overseas, where demand is expected to go up.
Incidentally, Nippon, Japan’s biggest steelmaker and ArcelorMittal, the world’s largest steelmaker, had jointly bought India’s bankrupt Essar Steel, which has an annual capacity of 9.6 million tons.
Miyamoto also told the news agency during his interview that Nippon Steel was actively contemplating a plan to construct an electric furnace at its U.S. joint venture with ArcelorMittal in Calvert, Alabama. It will have a furnace of 1.5 MT of annual output capacity as a first step.
ArcelorMittal announced in September this year it would sell most of its U.S. assets to Cleveland-Cliffs Inc. The sale did not include the Calvert facility.
As for new venture ArcelorMittal Nippon Steel India, he said there are plans to increase capacity to between 12 million and 15 million tons in the future.
The Nikkei Asian Review reported the Indian subsidiary aimed more than double its steel production capacity to 23 MT a year by the 2030s.
The plan involves fresh investments and acquisitions. At present, the plant can produce about 9.6 million tons of steel products a year.
The Indian market, a lucrative one for steel, has suffered a temporary slowdown because of the COVID-19 pandemic.
However, in the last two months, India’s steel market has rebounded quickly. Crude steel output in India fell 60% on the year in April. However, it picked up 1% to 9.06 million tons in October, the first increase in eight months.
India had produced 111.2 million tons of crude steel last year, an 80% jump in over a decade.
The one thing working in India’s favor compared to China and some other major markets is the fact that despite India being the second-largest steel producer in the world, it is also the second-largest steel consumer globally.
India’s per-capita steel consumption is low at 74.1 kg in fiscal year 2019. Meanwhile, the global average per-capita consumption for 2019 stood at 229.3 kg.
To ramp this up, India’s National Steel Policy aims to increase per-capita steel consumption to 160 kg by fiscal year 2031. The Indian market is thus crucial to Nippon Steel, even as steel demand in Japan could dwindle in the coming months.
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