Nippon Steel, Arcelor Mittal Stop US Galvanizing Line Construction

Nippon Steel announced on Thursday the firm and Arcelor Mittal agreed to postpone construction work for expansion of continuous galvanizing line for automobile at the 50/50 joint venture, I/N Kote in USA. The construction is suspended when North American automobile market shrinks rapidly while the expansion working started partly. The world top 2 steel makers postpone the construction until they could expect recovery for North American automobile market. The makers share view North American automobile market will grow in mid- and long-term and strategic market for the steel makers. They keep talking for restart of the construction.

The steel makers share the strategy to improve the presence in North American automotive flat steel market by expanding high grade and quality hot dip galvanizing steel including high tensile products to meet growing demand. They try to find the timing to restart the construction for the new line while they delay the schedule due to weak market.

The steel makers announced in April they build second continuous galvanizing line with 540,000 short ton of annual output capacity at I/N Kote for around US$ 240 million starting the operation in 2010. They try to launch the new line as early as possible when Japanese automakers’ transplants expand the production in and after 2010.

I/N Kote in New Carlisle, Indiana supplies high grade automotive flat steel from the continuous galvanizing line with 500,000 short ton of annual output capacity and electrogalvanizing line with 450,000 short ton of capacity. The brother company, I/N Tek, in which Arcelor Mittal has 60% share with 40% share by Nippon Steel, is in same location as I/N Kote and provides mother cold rolled flat steel for I/N Kote from the cold rolling mill with 1.7 million short ton of capacity.