Nippon Steel expects its U.S. Steel acquisition to contribute to earnings in fiscal 2026, a turnaround from zero contribution this year. Chief Financial Officer Takahiko Iwai stated that capacity cuts are unnecessary, citing growing U.S. steel demand and ongoing improvements through capital expenditure. Approximately 100 Nippon Steel staff are in the U.S. to implement best practices and advanced technology. The company previously cut its earnings forecast for the U.S. business due to weak market conditions, buyer hesitation over tariffs, and transport disruptions.
Facility improvements are expected to boost next year's results, with the "Big River 2" plant now operating near full capacity and set to provide a full-year impact. Nippon Steel aims to address U.S. Steel's high variable-cost structure, a result of underinvestment, by implementing a strategy for stable profits during market downturns. Planned investments over four years to increase high-margin, value-added products are projected to significantly enhance quality and cost competitiveness.
The U.S. market's strength in high-grade steel and reduced impact from Chinese competition are key advantages. Regarding acquisition financing, Nippon Steel is exploring options for the 1.3 trillion yen bridge loan facing refinancing deadlines in June.