Japanese steelmaker Nippon Steel Corporation announced it has entered into a joint venture agreement with local company Nakayama Steel Works to form a new company - tentatively named NN STEEL LLC - to build and operate an electric arc furnace at Nakayama's Funamachi plant. The agreement formalizes their business alliance to produce flat ingots and supply processed steel products via the EAF route.
Under the agreement:
- Nakayama Steel will own a 51 percent share and Nippon Steel will own a 49 percent share.
- Total planned investment, including the EAF facility and related facilities building, amounts to up to 105.5 billion yen ($674.79 million) with an initial capital of up to 55.7 billion yen ($356.23 million).
- The new joint venture is planned to be officially established in March 2026.
- Construction work for the EAF is expected to begin in November 2026 and begin in 2030 or later.
Faced with a continued decline in domestic demand for steel, Nippon Steel aims to improve cost competitiveness and expand its product offering by leveraging the combined strengths of its group companies. Under a business alliance with Nakayama Steel, the company plans to produce slabs using the new EAF and then process them into hot-rolled coils or other finished steel products that Nippon Steel will buy and sell. This approach is designed to increase flexibility, reduce costs and better meet demand for
