August 4, 2026 - Nippon Steel's acquisition of U.S. Steel is beginning to deliver stronger financial results, with the American business becoming one of the company's largest contributors to profit as domestic steel market conditions improve.

During the quarter ended June 30, U.S. Steel generated 32.2 billion yen (about $204.5 million) in underlying business profit, accounting for nearly one-third of Nippon Steel's total underlying earnings. Stronger U.S. steel prices, improved operating performance and the ongoing recovery in the domestic market helped offset weaker demand in several international markets, including the Middle East.

Reflecting that momentum, Nippon Steel increased its fiscal 2026 business profit forecast for U.S. Steel to 180 billion yen ($1.14 billion), up from its previous projection of 100 billion yen. The company said the higher outlook is supported by the full operational benefits of restarting a blast furnace and expectations that U.S. steel market conditions will continue to strengthen.

The improvement marks a sharp turnaround from fiscal 2025, when Nippon Steel recorded a 5.6 billion yen ($35.5 million) loss related to U.S. Steel. Since then, higher domestic steel prices—supported in part by U.S. trade measures—and steady customer demand have lifted profitability.

Those gains helped offset several headwinds elsewhere in the business. The company continued to face rising raw material and fuel expenses, while lower steel exports to the Middle East weighed on results in Japan.

For the quarter, Nippon Steel reported revenue of 2.8 trillion yen ($17.94 billion), a 40.4% increase from a year earlier, driven by stronger performance across its steelmaking and steel fabrication businesses. Business profit rose 50% year over year to 145.5 billion yen ($924.7 million).

Underlying business profit, which excludes inventory valuation effects and is considered by the company to better reflect core operating performance, totaled 108.4 billion yen ($688.7 million). While lower than the 173.6 billion yen recorded during the same period last year, management remains optimistic about earnings prospects.

Nippon Steel now expects full-year underlying business profit to exceed 700 billion yen ($4.45 billion), compared with 650.4 billion yen in the previous fiscal year. The company cited continued investment in both the United States and Europe, with U.S. Steel expected to remain a key driver of future earnings growth.

As part of its long-term expansion strategy, Nippon Steel plans to invest $11 billion in U.S. operations by the end of 2028. The spending is aimed at increasing production capacity while improving energy efficiency, product quality and overall manufacturing productivity. The investment commitment formed a major component of the company's $14.9 billion acquisition of U.S. Steel, which received regulatory approval in June 2025.

As of Aug. 4, Nippon Steel had invested approximately $3.7 billion toward that goal. Major projects nearing completion include a blast furnace reline and hot strip mill modernization at the Gary Works facility in Indiana, with both scheduled to wrap up by the end of the summer.

Additional projects remain underway across the U.S., including construction of a direct reduced iron facility in Osceola, Arkansas, installation of a slag recycling system and hot strip mill upgrades at the Mon Valley Works in Pennsylvania, and a recently announced expansion of an existing quench and tempering line in Fairfield, Alabama.