Nikkei reported that Nippon Steel Corporation is among the Japanese steelmakers accelerating investment in emerging nations and other overseas markets on expectations of growing demand.
Nippon Steel said that it will construct a plant for automobile steel sheet in Thailand, with the facility to go onstream in 2013. The firm also has plans to build similar plants in India and Mexico in 2013. Its second production line in Brazil is to begin operations soon.
JFE Holdings Inc unit JFE Steel Corporation intends to set up a new plant in Thailand in 2013, with new production lines slated to go online in China in stages starting this month.
Both steelmakers are also increasing supplies to overseas partners with which they do not have capital ties. But exchange rates could become a problem, given that the yen is still strong even after weakening slightly in recent days. The Japanese steelmakers could lose out to South Korean rivals such as POSCO, who are taking the offensive in Asia on the back of a weak won.
The Japanese firms are seeking to build blast furnaces abroad to reduce foreign exchange risk and to tap overseas demand. Nippon Steel and JFE have separately proposed to do so in Thailand, and they are also discussing construction in India with their respective partners there. How quickly they make a decision to spend the hundreds of billions of yen required to build a blast furnace may determine who wins out against overseas rivals.
( Source: www.steelguru.com )