Steel Mills

Nippon Considers Sale of Indiana Joint Ventures

October 14, 2020

Nippon Steel & Sumitomo Metal Corp. is considering selling its shares of I/N Tek and I/N Kote, rolling and galvanizing plants held in a 50-50 joint venture with ArcelorMittal, to Cleveland-Cliffs. Cliffs acquired ArcelorMittal’s shares of the two plants in New Carlisle, Ind., in a deal for the company’s U.S. assets last month.

Nippon Steel is expected to post a net loss of $1.9 billion for the six months ending in September as a result of plummeting auto demand during the COVID-19 pandemic. Nippon Steel is focusing on oversea opportunities and on streamlining operations, including closing a plant in western Japan. The restructuring will reduce Nippon’s annual production capacity by about five million tons.

Nippon said low profitability at the 30-year Indiana plants also informed the decision to sell its share in the joint-venture. The company owns a 40 percent share of I/N Tek and 50 percent share of I/N Kote.

I/N Tek produces 1.7 million tons annually through its Continuous Descale Cold Mill and 1.2 million tons through the Continuous Annealing Processing Line. I/N Kote produces 500,000 tons of hot dip galvanized and galvannealed and 400,000 tons of electrogalvanized sheet annually.

Nippon Steel also shares with ArcelorMittal the joint-venture AM/NS Calvert mill in Alabama, which was not included in the Cleveland-Cliffs agreement. ArcelorMittal plans to build an electric arc furnace steelmaking facility at Calvert that will be able to produce 1.5 million tons of steel slabs for the facility’s hot strip mill.