Japanese steelmaker Nippon Steel Corporation has announced that it has executed 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 slabs and supply processed steel products through the EAF route.
Under the agreement:
- Nakayama Steel will hold a 51 percent stake, while Nippon Steel will hold a 49 percent stake.
- The total planned investment - including the EAF facility and associated buildings - is up to JPY 105.5 billion ($674.79 million), with initial capital up to JPY 55.7 billion ($356.23 million).
- The new joint venture is planned to be formally established in March 2026.
- The construction works for the EAF is expected to start in November 2026 to be commenced in 2030 or later.
Facing a continued drop in domestic steel demand, Nippon Steel aims to boost cost competitiveness and expand its product offering by leveraging the combined strengths of its group companies. Through the business alliance with Nakayama Steel, the company plans to produce slabs using the new EAF, then have Nakayama process them into hot rolled coils or other finished steel products, which Nippon Steel will purchase and market. This approach is intended to improve flexibility, reduce costs and better meet demand across construction and industrial sectors in Japan.
In May, the companies signed a basic agreement and the execution of the joint venture agreement was scheduled for September 2025, as SteelOrbis previously reported.
