JFE Steel, the world’s fifth-largest steelmaker, is forging an alliance with JSW Steel whereby it will supply technology to the Indian company to make auto-grade steel.
Details of the alliance are expected to be announced Thursday and may also include a stake sale in JSW, sources said.
JSW Steel declined to comment. An email query to JFE went unanswered. But the Japanese No. 2 steelmaker after Nippon Steel, on its website, said it is “building strategic alliances with foreign downstream companies to maintain stable exports and maximise capacity utilisation”.
Sources familiar with the development said the JSW board gave a formal nod to the alliance during its board meeting on October 23, the day the company announced net profit rose 42% in the quarter to September 30.
When DNA had posed the question of a possible alliance with JFE to Sajjan Jindal on the sidelines of the results announcement event, he had just shrugged. Like peers elsewhere, Japanese steelmakers, too, have bore the brunt of declining demand. India, apart from China, is the only region in the world which has seen an uptick in steel demand.
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