Nippon Steel remains on track for EAF JV

Nippon Steel Corp. (NSC) has entered into a joint venture agreement with Nakayama Steel Works Ltd. to form a joint venture company (JVC) to finance and build an electric arc furnace (EAF) steel mill in Japan, where both companies are based.

The creation of the JVC follows up on a basic agreement signed in May between the two firms. Through the agreement, Nakayama Steel will operate the mill and NSC will purchase the resulting products.

“With domestic demand for steel expected to continue to decline, Nippon Steel is working to improve its sales capabilities and strengthen its cost competitiveness by leveraging the collective strength of its group companies,” NSC says.

The statement from NSC does not mention a tonnage figure for the proposed mill, but the addition of an EAF production line likely will contribute to increased recycled steel demand in Japan. The EAF production line will be located within the premises of Nakayama Steel’s Funamachi Plant in Osaka, Japan.

The agreement has Nakayama Steel positioned as 51 percent owner of the JVC while NSC owns 49 percent.

The two companies estimate building and equipping the mill could cost nearly $680 million.

"Nakayama Steel will manufacture slabs using [the] EAF," NSC says. "Nippon Steel will purchase a portion of those slabs or will commission Nakayama Steel to perform additional processes of rolling and otherwise processing slabs and then purchase the processed hot-rolled coils and other products from Nakayama Steel.”