Nippon Steel Corp. is considering selling off its two automotive steel plants in the U.S. state of Indiana as part of global restructuring given a slump in demand amid the coronavirus pandemic, a company source said Wednesday.
Because its partner ArcelorMittal S.A., which jointly owns a company running the two plants, has decided to sell its share to a U.S. steel-maker, the leading Japanese steel-maker is thinking of following suit, the source said.
With the COVID-19 pandemic dealing a fresh blow to an industry already struggling with fierce competition from Chinese rivals, Nippon Steel had already announced it will close a plant in Kure, Hiroshima Prefecture, by September 2023 to slash costs and improve profitability.
The planned massive restructuring to cut back domestic output will result in a reduction of Nippon Steel’s annual output capacity by around 5 million tons, while generating a profit of roughly ¥10 billion ($95 million), according to the company.
The world’s No. 3 steel producer is focusing more on growing overseas markets, and last year bought Indian steel-maker Essar Steel India Ltd. jointly with world No. 1 ArcelorMittal.
In Japan, output of crude steel in 2019 fell 4.8% to 99.28 million tons, the fifth straight yearly decline, dipping below the 100 million-ton threshold for the first time in 10 years, according to the Japan Iron and Steel Federation.