Nippon Steel Low-Carbon Steel Investment Targets Slovakia

Nippon Steel Low-Carbon Steel Investment Targets Slovakia

Nippon Steel Corporation announced on September 16 that it will invest approximately EUR 900 million, equivalent to JPY 160 billion, to produce low-carbon steel at the Košice Steelworks of U.S. Steel Košice, s.r.o. in Slovakia. The investment will fund construction of a new electric arc furnace and an air separation unit. The project is intended to support a stable supply of high-quality, low-CO2 steel materials, primarily for the European market. Compared with blast furnaces, electric arc furnaces can reduce carbon dioxide emissions generated during steel production, supporting the project's lower-carbon production objective.

New Electric Arc Furnace Capacity and Timeline

The new electric arc furnace at the Košice Steelworks will have an annual production capacity of approximately 1.6 million tons. Construction is planned as part of the investment program designed to establish low-carbon steel production at the facility. The furnace is scheduled to begin operations in 2030, providing additional production capacity for steel materials intended mainly for customers in the European market. The project also includes an air separation unit, which will be constructed alongside the electric arc furnace. Together, these facilities represent the principal elements of the planned EUR 900 million investment in the Slovak steelworks.

Slovak Government and EU Subsidy Support

U.S. Steel Košice, s.r.o., the subsidiary operating the Košice Steelworks, has signed a contract with the Slovak government and the EU Modernization Fund to receive a subsidy of approximately EUR 350 million, equivalent to JPY 63 billion. The subsidy will support the investment required for the new low-carbon steel production facilities. The financial support reduces the amount of the project cost that must be covered directly through the company's investment program while supporting the development of electric arc furnace-based steelmaking in Slovakia. The announced subsidy forms a significant part of the overall project financing structure.

U.S. Steel Košice to Become Nippon Steel Slovakia

The ownership structure of the Košice Steelworks is also set to change. U.S. Steel Košice, s.r.o., which is currently a wholly owned subsidiary of United States Steel Corporation, will become a direct subsidiary of Nippon Steel on October 1. The company operating the Košice Steelworks will also change its name to “Nippon Steel Slovakia s.r.o.” This transition will place the Slovak steelmaking operation directly under Nippon Steel while the planned electric arc furnace project moves toward its targeted 2030 start of operations.

Industry Impact & Outlook

The project could strengthen low-carbon steel production capacity in the European market while changing the production structure at the Košice Steelworks from its existing blast-furnace-based approach toward electric arc furnace production. The combination of Nippon Steel's EUR 900 million investment and approximately EUR 350 million in subsidy support provides a defined framework for developing the new facility in Slovakia. The planned 1.6 million-ton annual capacity also establishes a substantial production base for low-CO2 steel materials. The October ownership transition and 2030 operating target will be important milestones as Nippon Steel integrates the facility and advances the low-carbon steel production project.

Frequently Asked Questions

What is Nippon Steel investing in at the Košice Steelworks?
Nippon Steel is investing approximately EUR 900 million to build a new electric arc furnace and an air separation unit at the Košice Steelworks in Slovakia. The new electric arc furnace is planned to have annual production capacity of approximately 1.6 million tons and is scheduled to begin operations in 2030. The project is intended to support production of high-quality low-CO2 steel materials mainly for the European market. The Slovak government and EU Modernization Fund will provide approximately EUR 350 million in subsidy support under a signed contract.