Nippon Steel: No need to cut production at U.S. Steel
Nippon Steel reports that there is no need to cut production at U.S. Steel, expecting the steelmaker to contribute to earnings in fiscal 2026, up from zero this year, helped by stronger steel prices and technology transfer.
Urgent steps are needed, however, to improve the U.S. Steel’s high-cost structure; though capacity reductions are unnecessary because U.S. steel demand is growing. Around 100 Nippon Steel staff had been sent to the U.S. to share best practices and advanced technology.
Nippon Steel, Japan’s biggest steelmaker, completed its $15 billion acquisition of U.S. Steel in June after protracted negotiations. In November it cut its earnings forecast for the U.S. business to zero from an estimate of $515 million for the nine months to March 2026 following the acquisition, which the company blamed on weak market conditions, buyers holding back due to U.S. tariffs and transport disruptions caused by a cold snap.
Next year’s result will be helped by facility improvements.
The new Big River 2 plant started operations in late 2024 and is now running at near full capacity. Nippon Steel plans to build a structure capable of securing stable profits even during market downturns. The U.S. is the world’s largest market for high-grade steel and is less affected by Chinese competition than other markets.
