Economy
Japan's Nippon Steel giant selling 2 plants in US due to COVID-19 - Reports

Just Earth News | @justearthnews | 14 Oct 2020 Print

Japan's Nippon Steel giant selling 2 plants in US due to COVID-19 - Reports

Tokyo/Sputnik: The largest Japanese steel producing corporation, Nippon Steel, is considering selling two of its factories in the United States as part of a strategy to cope with COVID-19 pandemic's consequences, Japanese broadcaster NHK reported on Wednesday, citing sources.

According to the report, two plants in the US mid-west state of Indiana have been put up for sale to an American company. They are jointly operated with the international steel making giant ArcelorMittal.

One of the reasons behind the decision, the report says, is that the facilities at the 30-year-old plants have depreciated, lowering profitability. Another reason is Nippon Steel's financial hardships resulting from the coronavirus pandemic, which triggered a drop in demand for automobile-related products. It is expected that the company will suffer a net loss of $1.9 billion in the six months through September.

At the same time, Nippon Steel is poised to build a scrap metal processing plant in the southeastern US state of Alabama, as it considers this segment of metal industry flexible enough to maneuver the demand and supply fluctuations. 

image: Wikimedia Commons