Nippon Steel Starts Talk with Arcelor Mittal for Alliance

President Akio Mimura of Nippon Steel said on Wednesday the firm started the talk with Arcelor Mittal to strengthen the strategic partnership. Mr. Mimura said they started to pick up challenges in the all aspects of the partnership. Nippon Steel tries to rebuild the partnership with the combined entity based on global strategic alliance with Arcelor and partnership in North America with Mittal Steel. The firm tries to realize next steps including additional continuous galvanizing line in North America to expand automotive steel supply capacity. Nippon Steel has cross license and joint development activities for automotive steel with Arcelor under the strategic alliance. They established automotive steel joint venture with Baoshan Iron & Steel in Shanghai to produce cold rolled steel and hot-dip galvanizing steel. Nippon Steel has joint ventures with Mittal Steel in Indiana, USA to produce cold rolled steel, electro-galvanizing and hot-dip galvanizing steel. North American transplants of Japanese automakers increase the output while US big 3 automakers shift from electro-galvanizing steel to hot-dip galvanizing steel. Nippon Steel and Mittal Steel considered expansion of hot-dip galvanizing steel output capacity including new line. However, the talk was halted after Mittal Steel offered take over bid for Arcelor. After Arcelor Mittal launched the new management team, Nippon Steel started the talk for strategic alliance with the new entity. Vice president Shoji Muneoka and managing director Yuki Iriyama of Nippon Steel join the talk. Nippon Steel’s joint ventures with Mittal Steel are I/N Tek and I/N Kote. I/N Tek, in which Nippon Steel has 40% of interest, has 1.65 million short ton of pickling and cold rolling capacity and 1 million short ton of continuous annealing capacity. The 50/50 joint venture, I/N Kote has 500,000 short ton of hot-dip galvanizing line and 400,000 short ton of electro-galvanizing line.