Major Japanese steelmakers Nippon Steel Corp. and JFE Steel Corp. said Friday they have reached an agreement to mutually supply semifinished steel products to address sudden changes in demand.
The rare arrangement between the rivals is aimed at ensuring a stable supply of steel products for customers, they said in a joint statement.
Nippon Steel and JFE denied they plan to expand the accord to other operations at this time.
Semifinished steel products, including blooms, billets and slabs, are later rolled into finished products like beams, bars and sheets.
Steelmakers have mutually supplied semifinished steel on a stopgap basis when production decreases due to blast furnace problems or checkups.
The agreement between Nippon Steel and JFE also covers changes in demand, including an increase in exports.
During negotiations for the agreement, Nippon Steel supplied semifinished steel products to JFE Steel's plant in the city of Chiba in late January because it ran short following a fire at the end of last year, the two companies said.
Nippon Steel will receive semifinished steel from JFE in March to meet soaring overseas orders for steel products.
Nippon Steel has already entered into mutual supply arrangements with Sumitomo Metal Industries Ltd. and Kobe Steel Ltd. under their tripartite capital and business tieup.