In an interview with the Nikkei on Monday, Nippon Steel Corporation’s Chairman, Eiji Hashimoto, unveiled a plan to boost the company’s crude steel production by 60% to 100 million tons within the next decade. Hashimoto emphasized that the company is committed to regaining its position as the world’s top steel producer within a decade, a goal that requires substantial upfront investments.
Nippon Steel, once the global leader in the early 1970s, saw its ranking fall due to the rise of Chinese competitors in the 2000s. This decline led to the Lost Decades, a period when the Japanese manufacturing sector struggled in general.
Central to Nippon Steel’s resurgence strategy is its recent acquisition of U.S. Steel, which was finalized in June. The company plans to invest 11 billion USD by 2028, focusing on advanced technologies that U.S. Steel currently lacks, such as electrical steel sheets and constructing new steel mills. This investment aims to boost crude steel production by over 20 million tons within ten years,
Hashimoto stated that the U.S. steel industry has faced a prolonged decline, resulting in a critical shortage of skilled personnel. Addressing the issue, Hashimoto plans to deploy an initial group of 40 Japanese technicians to spearhead cost-cutting initiatives.
The U.S. Steel acquisition, which took 18 months to negotiate, followed extensive market research and analysis. Hashimoto sees significant potential in the U.S. market, pointing out the strong demand for high-quality steel products. Through U.S. Steel, he stated the company will capture market share from the local number two, Cleveland-Cliffs, and more than double its U.S. market share from the current 15%.
Nippon Steel has also entered into a national security agreement with the U.S. government, issuing a golden share with veto rights. This move ensures the company cannot reduce local production capacity without the consent of the U.S. government. According to Hashimoto, the U.S. steel self-sufficiency rate relative to total demand stands at just 55%, providing ample room for domestic production growth, an objective U.S. President Donald Trump has also emphasized.
Regarding the $ 14.1 billion acquisition cost and the planned $ 11 billion investment, Hashimoto emphasized the importance of securing a production volume for technological advancement and maintenance in the steel industry. Stating that economies of scale are essential, he hinted at future M&A possibilities.
As Japan’s domestic steel demand stagnates at around 50 million tons annually, with projections of further decline to below 40 million tons in the long term, Nippon Steel aims to leverage its technological prowess globally, positioning itself as a hub for worldwide operations.
