Nippon Steel is ending its decades-long joint venture with Baoshan Iron & Steel

Nippon Steel is ending its decades-long joint venture with Baoshan Iron & Steel. It has significantly reduced its crude steel production in China by 70%. 

Nippon Steel ends its joint venture with Baoshan Iron & Steel. It has dissolved an agreement spanning decades. However, it was once symbolic of China’s emergence in the production of sophisticated steel.

The move slashes Nippon Steel’s potential output of crude steel in China by 70 per cent.
In 2004, Baosteel-Nippon Steel Automotive Steel Sheets was established as a 50-50 joint venture of Nippon Steel and Baoshan Iron & Steel. It was known as Baosteel, a member of the China Baowu Steel Group.

Discover how this dissolution impacts the future of automotive steel production in a rapidly evolving market.

Nippon Steel ends its joint venture and has decided not to renew the contract when the 20-year period ends in late August. It will sell all of its BNA shares to Baosteel for 1.758 billion yuan ($241 million), pending regulatory approval.

Japanese automakers are Nippon Steel’s key customers. Additionally, they are competing fiercely in China with local electric vehicle makers. Japanese steelmaker Nippon Steel has decided that it would not be easy to grow its business there. Henceforth, they will focus their investment resources on the United States and India.
The move to concentrate investment in the United States and India, earlier reported by the Nikkei Business Daily, was reached after the firm had concluded that it would not easily be able to grow its business in China.

This strategic decision marks a pivotal shift as Nippon Steel will sell its shares and redirect its focus amidst rising competition.

It will cut the production capacity that the company has in China by 70%, according to Nikkei, but the capacity of about 1 million metric tons per annum shall be maintained since it is under a joint business with Wuhan Iron and Steel, another unit of the China Baowu Steel Group.