Nippon Steel will form a 5.5 million tonnes/year crude steel capacity European steelmaking operation when it consolidates US Steel Kosice (USSK) and Ovako under direct ownership. The Japanese steelmaker aims to capture policy-supported regional demand and leverage its technological strengths to serve high-grade steel segments, Kallanish notes.
Nippon announced last week it will transition USSK to direct ownership and rename the unit to Nippon Steel Slovakia effective 1 October. The same will happen to Sweden-headquartered special steelmaker Ovako once Nippon completes in April 2027 its merger by absorption of subsidiary Sanyo Special Steel, which owns Ovako.
Nippon says it is “aiming to develop our European business through the formulation and execution of a growth strategy from a long-term perspective, including maximising synergies with Nippon Steel, upgrading product mix, and strengthening products and distribution channels.”
Ovako is a 1m t/y electric arc furnace-based crude steelmaking capacity specialty steel bar and wire rod producer with sites in Sweden and Finland, while USSK is a major blast furnace-based flat and electrical steelmaker, with 4.5m t/y of crude steel capacity situated in Slovakia.
In Central and Eastern Europe, USSK’s main markets, steel demand is expected to increase in the medium to long term due to factors such as the relocation of customer bases to the eastern regions, Nippon said last week.
The new structure would make Nippon a top ten EU crude steelmaker by capacity – unprecedented for a Japanese firm – behind heavyweights such as ArcelorMittal, thyssenkrupp Steel, Tata Steel, SSAB, voestalpine, Salzgitter, Celsa and Riva. Although Acciaierie d’Italia used to be near the top of this list, its effective capacity has dropped considerably due to well-publicised problems.
The move should also provide relief for USSK’s workforce which has faced some uncertainty over future plans for the Kosice plant since US Steel was acquired by Nippon last year.
