Following the acquisition of United States Steel Corporation (US Steel), Japan-based steelmaker Nippon Steel has announced that it plans to build a brand-new steel plant in the US, with final site selection expected by the end of 2026. The company aims to shortlist two or three candidate states by next summer.
According to the plan, the company will set up two electric arc furnaces that will primarily use scrap steel as raw material. Together, they are expected to annually produce about three million mt of crude steel, backed by an estimated $4 billion investment.
Key criteria for site selection and what Nippon seeks
According to Nippon Steel’s management, the company will evaluate potential locations based on several important factors: land availability, electricity supply, proximity to rail and road networks, access to labor, and local regulatory and policy environments. They will also consider regional steel demand and the ease of sourcing materials, including scrap steel, when narrowing down candidate states.
Strategic rationale: Strengthening US presence and modernizing production
The planned US plant aligns with Nippon Steel’s broader strategy to revitalize and expand its US operations under US Steel ownership. With earlier commitments to invest heavily in upgrading existing facilities, the new electric furnace plant will add modern, scrap-based steel production capacity, improving flexibility and energy efficiency.
Nippon Steel acknowledges recent challenges at US Steel, including weak performance caused by falling steel prices, high variable costs and unexpected disruptions. However, executives describe these issues as temporary, reaffirming their multi-year investment plan and long-term outlook.