Consolidating the key points from the New Year messages of major Japanese steelmakers (Nippon Steel and JFE), as well as management-level interviews reported in the press, let's examine the current challenges and strategic directions of major Japanese steel companies.

Despite the challenging business environment in 2023 characterized by sustained weakness in global manufacturing & construction industries and the economic downturn in China, the Japanese steel industry is perceived to have performed fairly good.

The Japanese steel industry faces common challenges due to various factors, including the global downturn in the steel market, overcapacity originating from China, influx of Chinese steel domestically, decoupling of product and raw material prices, and the blocization of the global steel market.

• The year 2024 will be another year marked by various risks and challenges, including the persistence of weak demand in steel-using industries, blocization of the global market, and the burden of decarbonization. Especially Nippon Steel's CEO, emphasizes geopolitical risks.

Key focus areas highlighted in Japanese steelmakers' New Year messages include: ▶Completion of domestic facility restructuring, ▶Bold initiatives in overseas growth markets, and ▶Commitment to green and digital transformation.

Nippon Steel, under the leadership of CEO Hashimoto, has made visible strides in enhancing the competitiveness of its domestic steel business, which was once its weakness, through innovations in both production and sales sides since his appointment. Now, the company is intensifying its efforts to strengthen its position in the global market.

• In 2024, Nippon Steel aims to "realize a global 100 million-ton production system and further sophisticate its measures to become the best steelmaker with world-leading capabilities."

• Key challenges this year include successfully concluding the acquisition of US Steel and advancing plans for expansion in India through AM/NS India, as well as deepening business in the ASEAN region using the Thai electric furnace hub acquired in 2022.

Nippon Steel's decision to invest ¥200 billion at the end of last year to acquire US Steel indicates its intention to strengthen its influence within the global steel industry by securing a major position in the US market.

In 2024, close attention will be required to observe the strategic moves of Japanese steelmakers in domestic and overseas markets, necessitating meticulous monitoring.