Nippon Steel in talks to buy steel mill in Southeast Asia

TokYO: Japan's biggest steelmaker Nippon Steel Corp is in talks to buy a steel mill in Southeast Asia in order to secure iron-making resources in the growing market and increase its overseas expansion, a senior executive said.

The discussions are under way to secure iron sources in ASEAN, according to Takahiro Mori, executive vice president at Nippon Steel.

He wouldn't say anything about the deal, but he said it could involve an electric furnace.

In March, the world's No 5 steelmaker said in March it may consider acquiring or investing in integrated steel mills in China and ASEAN countries to boost its global capacity of crude steel output to 100 million tons.

One hundred million is a symbolic figure for us to have a certain presence and influence, as a global steel major, Mori said.

The company is boosting capacity at its Indian joint venture with ArcelorMittal SA and building an electric furnace at its joint venture with ArcelorMittal.

Japan and the United States have recently agreed to start talks on tackling additional US tariffs on Japanese steel and aluminium imports, an irritant in trade relations between the two.

Our export volume to the United States is not large, but it has nearly halved since the extra tariffs were imposed, according to Mori, pointing out seamless pipes and railway rails as affected.

Mori said that the tariffs would be abolished because Nippon Steel wants to increase its exports and profits.

The steelmaker lifted its annual profit outlook early this month as robust global demand boosted steel products prices, and higher prices of iron ore and coking coal caused hefty appraisal gains on its stock.

With higher-than-expected profits for this year, the company plans to allocate more funds for growth businesses such as key magnetic steel sheets, used in electric vehicles and power generation, according to Mori.

Demand for magnetic steel sheets is expected to grow more than anticipated, as the global decarbonisation push is moving faster and stronger than expected, he said.

We are considering the most efficient way to invest in this area if needed and we are considering it as the most efficient way to do that. Nippon Steel is suing Toyota Motor and Baoshan Iron Steel, alleging that the two firms have infringed on its patents of magnetic steel sheets.