Nippon Steel and ArcelorMittal, two
of the world’s largest steel companies, have turned their attention to India
and Thailand amid weakening demand in Japan and the energy crisis in Europe.
The ArcelorMittal Nippon Steel India
joint venture (AM/NS India) has announced two new initiatives to expand
operations in India:
·
New construction and capacity expansion of upstream and
hot-rolling facilities at the Hazira integrated steel mill in Gujarat.
·
The purchase of port, electric power and other assets from the
Essar Group, an Indian conglomerate.
ArcelorMittal is the world’s
second-largest producer of steel. Headquartered in Luxembourg, it was created
in 2006 by the acquisition of European steel maker Arcelor by India’s Mittal
Steel.
Nippon Steel is Japan’s largest and the world’s fourth-largest steel maker. The world’s largest, third-largest and fifth-largest steel makers are Chinese. The sixth largest is South Korea’s POSCO. Incidentally, the largest American steel producer, Nucor, ranks 15th.
Owned 60% by Arcelor Mittal and 40%
by Nippon Steel, AM/NS India is the fifth largest producer of crude steel in
India. It was established in December 2019 through the acquisition of Essar
Steel India. Now the related infrastructure assets are being acquired.
Expansion in India offsets
ArcelorMittal’s troubles in Europe, where it plans to shut down a blast
furnace in Bremen and a plant in Hamburg due to high energy prices and weak
demand.
It also offers a significant growth
opportunity for Nippon Steel, which faces a shrinking domestic market. Steel
production in Japan has been on a downtrend since 2014.
Steel demand in India, on the other
hand, is expected to remain on a growth track well into the next decade –
supported by the growth of the population and economy, the government’s “Make
in India” industrialization program and the country’s growing allure as an
alternative invest
ent destination amid decoupling from China.