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Nippon Steel considers sale of two U.S. plants in global restructuring

Nippon Steel Corp. is considering selling off its two automotive steel plants in the U.S. state of Indiana as part of global restructuring given a slump in demand amid the COVID-19 pandemic, a company source said on Wednesday.

Because its partner ArcelorMittal S.A., which jointly owns a company running the two plants, has decided to sell its share to a U.S. steel-maker, the leading Japanese steel-maker is thinking of following suit, the source said.

With the COVID-19 pandemic dealing a fresh blow to an industry already struggling with fierce competition from Chinese rivals, Nippon Steel had already announced it will close a plant in Kure, Hiroshima Prefecture, by September 2023 to slash costs and improve profitability.

The planned massive restructuring to cut back domestic output will result in a reduction of Nippon Steel's annual output capacity by around 5 million tons, while generating a profit of roughly ¥10 billion ($95 million), according to the company.

The world's No. 3 steel producer is focusing more on growing overseas markets, and last year bought Indian steel-maker Essar Steel India Ltd. jointly with world No. 1 ArcelorMittal.