Nippon Steel Ends Joint Venture with Baosteel
[tintuc]
Japan's Nippon Steel agreed with its Chinese partner Baosteel to dissolve their joint venture on August 29, withdrawing from a major steel business in China.
Nippon Steel will transfer its shares in the joint venture to Baosteel, ending a 20-year partnership in automotive steel sheet production, the Japanese steelmaker announced on July 23. Baosteel-NSC Automotive Steel Sheets produces cold-rolled and hot-dip galvanized steel sheets at its Shanghai plant, which has a continuous pickling and cold-rolling capacity of 2.4 million tons per year.
The reason for the withdrawal was not disclosed, but it may partly be due to weaker steel demand from Japanese automakers in China. Japanese automaker Mitsubishi decided in October 2023 to cease production in China after sluggish sales. Other Japanese automakers are also struggling in China, partly because their sales are pressured by the rapid growth of Chinese electric vehicle manufacturers.
Nippon Steel's withdrawal from China is not surprising, as the company is focusing on India, the US, and Southeast Asia as strategic regions to achieve its goal of producing 100 million tons of crude steel annually worldwide as part of its medium- and long-term strategy. The company's domestic crude steel production was 35 million tons in 2023, an increase of 2.2% from the previous year.
Nippon Steel is making efforts to expand in the US market with a proposed $15 billion acquisition of US Steel. It is determined to complete the acquisition despite political obstacles in the US. The company has hired former US Secretary of State Mike Pompeo to strengthen its lobbying efforts in Washington to counter criticisms, including from current Republican presidential candidate Donald Trump, who opposes selling US Steel to a foreign company.
[/tintuc]
Japan's Nippon Steel agreed with its Chinese partner Baosteel to dissolve their joint venture on August 29, withdrawing from a major steel business in China.
Nippon Steel will transfer its shares in the joint venture to Baosteel, ending a 20-year partnership in automotive steel sheet production, the Japanese steelmaker announced on July 23. Baosteel-NSC Automotive Steel Sheets produces cold-rolled and hot-dip galvanized steel sheets at its Shanghai plant, which has a continuous pickling and cold-rolling capacity of 2.4 million tons per year.
The reason for the withdrawal was not disclosed, but it may partly be due to weaker steel demand from Japanese automakers in China. Japanese automaker Mitsubishi decided in October 2023 to cease production in China after sluggish sales. Other Japanese automakers are also struggling in China, partly because their sales are pressured by the rapid growth of Chinese electric vehicle manufacturers.
Nippon Steel's withdrawal from China is not surprising, as the company is focusing on India, the US, and Southeast Asia as strategic regions to achieve its goal of producing 100 million tons of crude steel annually worldwide as part of its medium- and long-term strategy. The company's domestic crude steel production was 35 million tons in 2023, an increase of 2.2% from the previous year.
Nippon Steel is making efforts to expand in the US market with a proposed $15 billion acquisition of US Steel. It is determined to complete the acquisition despite political obstacles in the US. The company has hired former US Secretary of State Mike Pompeo to strengthen its lobbying efforts in Washington to counter criticisms, including from current Republican presidential candidate Donald Trump, who opposes selling US Steel to a foreign company.
