Steel Mills
Biden admin scrutinizing Nippon Steel’s Chinese ops in USS deal: Report
Written by Laura Miller
February 23, 2024
Nippon Steel Corp.’s (NSC) operations in China are a potential security concern of the Biden administration, according to a Bloomberg report citing anonymous sources close to the matter.
The sources told Bloomberg that NSC’s exposure to China is worrisome to the administration, which is looking to safeguard the interests of American industry as the Japanese steelmaker seeks to acquire the iconic U.S. Steel.
The administration may also be weighing additional tariffs on steel and aluminum imports from China, the sources added.
“The complication for Nippon Steel is that regulators may look unfavorably on whether its acquisition of U.S. Steel could allow more access to US markets for Chinese-sourced steel, while the administration uses tariffs and other measures to keep steel from being dumped on the American market,” the Bloomberg article stated.
However, NSC’s Chinese operations are very limited, it said in an email statement to SMU, representing less than 5% of its global production capacity. Globally, NSC has an annual steel production capacity of ~73 million short tons. Acquiring U.S. Steel would add another 22.4 million st to that figure. The Tokyo-based steelmaker aims to grow its global steelmaking capacity to 110 million stpy (100 million mt).
Additionally, NSC noted that it does not operate any primary operation upstream facilities in China, only downstream businesses.
“Our operations in China – including joint ventures with Chinese partners – have no control over our operations or business decisions outside of China, including in the US,” NSC stated.
The company added that, through its acquisition of the Pittsburgh-based steelmaker, its “goal is to enhance U.S. Steel’s competitiveness in the global steel market and address the industry’s overproduction and overcapacity issues – largely driven from China.”
When asked for comment, U.S. Steel deferred to Nippon on the matter.
Laura Miller
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