Against a backdrop of declining domestic steel demand, the 3 major steelmakers are stepping up overseas investment. Nippon Steel plans additional investment in U.S. Steel, while JFE Steel is moving ahead with the construction of a new blast furnace at its Indian operations. The companies are also shifting toward electric arc furnaces with an eye to redeveloping domestic sites and reducing CO2 emissions.
Japan’s steel industry is seeing domestic demand decline due to population loss and intensifying price competition from China and other countries, while exports have also struggled to grow because of U.S. tariffs and other factors. The 3 major steelmakers are investing in overseas production and strengthening their focus on responding to declining domestic demand.
Following its acquisition of U.S. Steel, Nippon Steel plans to make approximately $11 billion in additional investment in the United States by 2028, including the installation of rolling equipment at the Mon Valley Works to roll steel into thin sheets. JFE Steel is expanding the Sambalpur steelworks in eastern India and constructing a new blast furnace.
Blast furnaces require substantial capital investment and are currently concentrated among 3 companies: Nippon Steel, JFE Steel and Kobe Steel. By contrast, the electric arc furnace market comprises more than 30 companies, and moves are advancing to switch some blast furnaces to electric arc furnaces in order to reduce CO2 emissions.
In Japan, the effective use of extensive land assets, including the former Kure site and land involved in Universal Studios Japan’s expansion plans, is an issue. Steelmakers are expected to pursue stable growth through overseas expansion while making use of their domestic assets.