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Dive Brief:
- US Steel has presented a multi-year project plans to spend $14 billion on US growth capital backed by parent company Nippon Steel.
- The Pittsburgh-based steelmaker said it will invest $11 billion in its domestic facilities with a focus on manufacturing, research and development and product innovation by the end of 2028. The effort will also “protect and create” more than 100,000 jobs nationwide.
- As part of their partnership, US Steel and Nippon Steel are also focused on driving operational efficiencies and cost improvements to fund their growth plan. They aim to unlock an earnings and synergy benefit of $2.5 billion annually by 2030, according to the Japanese company’s second-quarter results presentation.
Diving knowledge:
Since it was acquired in June, US Steel is already making improvements to the facility with support from Nippon Steel. In September, the company’s board of directors give the green light to two projects totaling $300 million: a slag recycler at a plant outside Pittsburgh and hot strip mill upgrades in Gary, Indiana.
Other ongoing projects include a new direct reduction iron plant, a blast furnace renovation and electric arc furnace upgrades at US Steel sites, it said. Nippon Steel’s latest earnings report. The companies have announced this week a Investment of 75 million dollars to install a premium threading line at US Steel’s tubular operations in Fairfield, Alabama.
“These initiatives are already producing real results,” US Steel CEO Dave Burritt said in a statement. “We are well on our way to forging the future of steelmaking in America.”
Leveraging Nippon Steel’s technology expertise and management resources, the companies said they have identified more than 200 initiatives with the potential to drive operational efficiencies across US Steel.
The investment commitments come as demand for steel products is declining in China, Japan and other key markets, driven in part by tariff uncertainty. In the U.S., steel market conditions are “significantly below” expectations as equipment problems and increased uncertainty drive up costs, according to Nippon Steel earnings presentation. As a result, the company excluded US Steel from its fiscal year outlook.
The Japan-based steelmaker forecast an underlying operating profit of ¥680 billion (or $4.51 billion) for the year ending in March. That’s down from ¥793.7 billion in fiscal 2024.
“I am confident that as we continue to combine Nippon Steel’s technological expertise with US Steel’s operations, we will create additional value for stakeholders and see additional growth and financial benefits,” said Takahiro Mori, Nippon Steel’s representative director and chairman of US Steel’s board of directors.
