Dive Brief:
- U.S. Steel has unveiled a multi-year plan to spend $14 billion on U.S. growth capital with support from parent company Nippon Steel.
- The Pittsburgh-based steelmaker said it will invest $11 billion on its domestic facilities with a focus on manufacturing, research and development and product innovation by the end of 2028. The effort will also “protect and create” more than 100,000 jobs nationwide.
- As part of their partnership, U.S. Steel and Nippon Steel are also focused on driving operational efficiencies and cost improvements to fund their growth plan. They aim to unlock an earnings and synergy benefit of $2.5 billion per year by 2030, according to the Japan-based company’s second-quarter earnings presentation.
Dive Insight:
Since being acquired in June, U.S. Steel is already making facility improvements with support from Nippon Steel. In September, the company’s board of directors greenlit two projects totaling $300 million: a slag recycler at a plant outside of Pittsburgh and hot strip mill improvements in Gary, Indiana.
Other projects in the pipeline include a new direct reduced iron plant, a blast furnace revamp and electric arc furnace improvements across U.S. Steel’s sites, according to Nippon Steel’s latest earnings report. The companies this week announced a $75 million investment to install a premium thread line at U.S. Steel’s tubular operations in Fairfield, Alabama.
“These initiatives are already delivering real results,” U.S. Steel’s CEO Dave Burritt said in a statement. “We are on a great path to forging the future of steelmaking in America.”
By leveraging Nippon Steel’s technological expertise and management resources, the companies said they have identified more than 200 initiatives with the potential to drive operational efficiencies across U.S. Steel.
The investment commitments come as demand for steel products is declining in China, Japan and other key markets, driven in part by tariff uncertainty. In the United States, steel market conditions are “significantly below” expectations as equipment issues and heightened uncertainty raise costs, according to Nippon Steel’s earnings presentation. As a result, the company excluded U.S. Steel from its fiscal year outlook.
The Japan-based steelmaker is forecasting an underlying business profit of 680 billion yen (or $4.51 billion) for the year ending in March. That is down from 793.7 billion yen in fiscal year 2024.
“I am confident that as we continue to combine Nippon Steel’s technological expertise with U. S. Steel’s operations, we will create additional value for stakeholders and see further growth and financial benefits to come,” Takahiro Mori, Nippon Steel’s representative director and chairman of the U.S. Steel board said in a statement.
