By Yuka Obayashi and Kentaro Okasaka
TOKYO, June 18 (Reuters) - Nippon Steel, the world's No. 3 steelmaker, expects the American market to remain buoyant, supported by import tariffs and resilient demand, which could lift earnings at U.S. Steel beyond current forecasts, Vice Chairman Takahiro Mori said.
"We are confident that U.S. Steel will be able to post profits in excess of 100 billion yen ($624 million) this year," Mori said, adding that the strong market outlook through 2027 suggested additional
upside. He said U.S. Steel would generate an annual profit of 300 billion yen to 400 billion yen in the long run.
Mori described U.S. conditions as highly favourable, with hot-rolled steel sheet prices above $1,200 per metric ton, more than double the level in Asia. To capitalise on the strong pricing environment, U.S. Steel resumed an idled Illinois blast furnace in March and is now running it at full capacity.
His comments come a year after Nippon Steel completed its $14.9 billion acquisition of U.S. Steel following an 18-month political and regulatory battle that faced opposition in Washington.
About 100 Nippon Steel staff seconded from Japan are working on 260 operational improvement initiatives, helping to boost yields and generate synergies, Mori said. He added that U.S. Steel's board has already approved roughly one-third of the $11 billion investment package pledged by Nippon Steel through 2028, with returns expected to grow to $3 billion a year by 2035.
Mori acknowledged risks from inflation-driven cost pressures and labour shortages as projects compete for workers, but said the U.S. government, despite holding a golden share, has not intervened in management decisions since the deal closed.
Despite heightened global uncertainty caused by geopolitical tensions and protectionism, Mori said Nippon Steel would continue pursuing overseas growth, focusing on the U.S., India, Thailand and Europe.
"We aim to lift overseas profit to more than 500 billion yen by 2030, nearly five times fiscal 2025 levels," Mori said.
Mori, who led negotiations for the U.S. Steel acquisition, said global structural shifts had made it more important for companies operating overseas to build relationships with key policymakers and government officials and align investments and operations with national industrial policies.
($1 = 160.2600 yen)
(Reporting by Yuka Obayashi and Kentaro Okasaka; Editing by Thomas Derpinghaus)
