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Eiji Hashimoto, Chairman and CEO of Nippon Steel, speaks during a press conference in Tokyo, Japan, on June 19 (local time) following the company’s completion of its acquisition of U.S. Steel. (Photo: EPA/Yonhap News) |
[Alpha Biz= Paul Lee] Tokyo, Japan — July 7, 2025 — Following the completion of its ¥2 trillion (approx. USD 13 billion) acquisition of U.S. Steel last month, Nippon Steel Chairman and CEO Eiji Hashimoto has revealed plans to invest an additional ¥1.5–1.6 trillion (USD 10–11 billion) into revitalizing the American steelmaker.
In an interview with Nikkei on July 7, Hashimoto acknowledged that many may be surprised by the scale of the new investment. “People may be startled to hear that on top of the ¥2 trillion acquisition cost, we’re committing another ¥1.5 to 1.6 trillion. But such costs are inherent to the steel industry,” he said.
Hashimoto added that Nippon Steel invested ¥1.6 trillion domestically between 2019 and 2024 under his leadership, emphasizing that “as long as there is demand, returns will follow.” However, he expressed concern about workforce shortages in the U.S., where the number of manufacturing workers is just 13 million and continues to decline.
To address productivity challenges at U.S. Steel—which currently operates at just 70% capacity—Nippon Steel will dispatch 40 engineers from Japan. “The low output relative to installed capacity stems from outdated technology and high variable costs,” Hashimoto explained. “Yields are lower than ours, facilities are aging, and logistics systems are underdeveloped.”
The technical support team from Japan will work to modernize operations and raise efficiency to recover fixed costs. “The main culprit is high variable costs caused by poor manufacturing capabilities,” he said.
Hashimoto emphasized that the company plans to target a broader U.S. customer base, including Japanese automakers that Nippon Steel previously did not supply from within the U.S. He cited Cleveland-Cliffs—America’s second-largest steelmaker—as the primary competitor to watch.
On future steel demand in the U.S., Hashimoto pointed to growing needs for advanced electrical steel used in transformers for AI-related power infrastructure, as well as in hybrid and electric vehicle motors—materials that U.S. producers are currently unable to manufacture at required specifications.
Commenting on the global steel industry, Hashimoto warned that intensified competition, particularly from low-cost Chinese producers, may drive weaker players into bankruptcy. “Opportunities will arise for stronger companies,” he stated, noting that Nippon Steel is prepared to consider acquisitions, especially of smaller steelmakers, though he declined to name specific targets.
The U.S. market is currently dominated by four major players, including U.S. Steel, which now operates under Nippon Steel’s umbrella.
알파경제 Paul Lee 특파원(hoondork1977@alphabiz.co.kr)
