Baosteel Acquires Nippon Steel's Stake Amid Declining Demand

Baosteel is set to acquire Nippon Steel's 50% stake in their auto steel joint venture for around USD 242 million. The contract was approaching its expiration date on July 30. This move comes as demand for steel in China weakens with the auto industry's shift to electric vehicles. Nippon Steel aims to focus on its bid for US Steel. Baosteel's share price dropped 2.5%, while Nippon Steel's shares increased by 0.3%.

On Tuesday, China's Baosteel announced plans to acquire Nippon Steel's 50% stake in their auto steel joint venture for approximately USD 242 million. The auto steel joint venture, Baosteel Nippon Steel Automotive Steel Sheets, was nearing the end of its contract, set to expire on July 30.

This acquisition follows weakening steel demand in China due to the automotive industry's increasing shift toward electric vehicles. The Japanese newspaper Nikkei reported that Nippon Steel is looking to divert its focus towards other opportunities, including a contentious bid for US Steel.

The market reacted to the announcement with Baosteel's share price falling by 2.5%, whereas Nippon Steel's shares saw a slight rise of 0.3%.