Nippon Steel, Sumitomo Metals in Talk to Merge Stainless Pipe Subsidiaries

Nippon Steel and Sumitomo Metal Industries consider integration of the groups’ stainless steel welded pipe makers. They are in final talk to merge Nippon Steel group’s Nittai Corporation and Sumitomo Metals group’s Sumikin Stainless Steel Tube as early as July. The 2 major steel makers try to improve the efficiency for better competitiveness through the integration.

Chiba based Nittai makes stainless welded pipe from large to small diameters while the firm also makes titanium and nickel alloy welded pipe. Ibaraki based Sumikin Stainless Steel Tube makes stainless, nickel rich alloy and titanium welded pipe at Ibaraki plant while the firm makes cold drawing seamless pile and high alloy pipe at the Kanagawa plant.

Stainless welded pipe is oversupply due to slow demand at home and abroad. The makers’ profitability is severe when the market price halved to around 460,000 yen per tonne for SUS304 grade around Tokyo from the peak in July-August 2007 with plunge of nickel ingot price.