Nippon Steel to merge three pipe subsidiaries to optimize operations

Japanese steel company Nippon Steel has announced plans to merge three subsidiaries: Nittetsu Katakura Steel Tube, Tsurumi Steel Tube, and Nippon Steel Fine Tube.

The aim of this move is to respond to structural changes in the market.

The three companies supply a wide range of steel pipes for the automotive, construction, and industrial equipment sectors. However, they are currently facing increasingly challenging market conditions, including prolonged stagnation in domestic demand for steel, labor shortages, and the electrification of vehicles, which is changing the demand structure in mechanical pipe manufacturing.

The merger agreement will be submitted for approval at each company’s shareholders’ meeting. The planned integration date is January 1, 2026. The new structure will operate under the name Nippon Steel Finetube Co.

“In the future, Nippon Steel Group will create a comprehensive system to further improve service and the ability to offer solutions, thereby further enhancing customer trust,” the company said in a statement.

As a reminder, Nippon Steel plans to double its steel production in the US within 3-5 years. The company plans to achieve this by increasing production efficiency at US Steel, the acquisition of which was finalized in June this year. The Japanese steel manufacturer plans to invest $11 billion in modernizing US Steel’s outdated production facilities by 2028.