The saturation of the global market with an excess of steel, caused by active exports from China, may come to an end soon. According to Takahiko Iwai, CFO of Nippon Steel, this opens up prospects for Asian countries to revitalize their metallurgy sector.
This is reported by Finway
Chinese Exporters Face Challenges
As Iwai points out, Chinese steel manufacturers are currently struggling to ensure profitability from external supplies due to the oversaturation of the regional market. The situation is further complicated by restrictive trade measures, including anti-dumping tariffs that several countries have recently begun to implement. This is leading to a gradual reduction in export volumes.
“They are gradually running out of opportunities for further development,” explained the CFO of Nippon Steel.
Iwai noted that the Asian steel market is likely already close to the lowest point of the cycle, after which a gradual improvement is expected. However, he did not specify the exact timeline for recovery.
Nippon Steel Bets on the US Market
In an interview with Reuters, Takahiko Iwai also stated that Nippon Steel does not plan to reduce the production capacity of its US Steel division. On the contrary, in the fiscal years 2026–2027, an increase in profits for the American subsidiary is expected due to higher steel prices and the implementation of new technologies.
Despite the need to optimize costs, the company considers drastic production cuts, as occurred in Japan in the early 2020s, to be impractical, as demand for steel in the US is rising.
According to Iwai, the biggest challenge for US Steel is the high proportion of variable costs that has arisen due to years of underfunding. In response, Nippon Steel plans to implement effective mechanisms to stabilize profits even during market downturns. The Japanese company intends to invest in expanding its share of value-added products, which will enhance quality and competitiveness.
The CFO of Nippon Steel also emphasized that the US market is less susceptible to competition from China compared to other countries.