Japanese steel giant Nippon Steel has announced it is withdrawing from a 20-year joint venture with Baoshan Iron and Steel Company, a relationship that for decades has symbolized progress in modernizing China’s steel industry.
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As a result of this decision, Nippon Steel will reduce its production capacity in China by up to 70 percent.
The abandonment of the joint venture with Baoshan is partly related to trends in the automobile industry, and partly to the global geopolitical context.
Japanese automakers, Nippon Steel’s main customers, are rapidly losing market share in China due to the rise of domestic electric car makers, and the steelmaker has decided that the Chinese market now offers few growth opportunities.
Nippon Steel instead intends to focus its investments in India and the United States. In the United States specifically, the company is trying to overcome political obstacles to the merger with US Steel.
