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Monday, 10 December, 2001, 06:38 GMT
Steel firms mull merger to survive
Steel furnace
US steel manufacturers are fighting for ways to remain competitive
Two leading US steelmakers have announced that they have begun merger talks.

US Steel Corporation is in talks to buy its rival, Japan NKK's National Steel.

The beleaguered domestic US steel industry is struggling to compete with a flood of imports of cheap steel from around the world.

Last week, Bethlehem steel - which has already filed for bankruptcy protection - said that it was also involved in merger discussion with US Steel.

Note of caution

NKK - Japan's second largest steel maker - said in a statement that it has a sense of crisis which requires immediate action in the US.

"NKK, with US Steel, supports consolidation as a fundamental solution for the structural problem of the US steel industry," the firm said.

But US Steel cautioned that any deal would be subject to a substantial restructuring of National Steel's debt.

Bail-out

US Steel renewed its call on Sunday for the government to address "the excessive imports of steel that have been depressing markets in the US".

The EU, Canada, South Korea, Japan, Mexico, Turkey, Brazil, China, Russia, Taiwan, South Africa, Argentina and Ukraine all export steel to the US.

Last week, US Steel and Bethlehem Steel called for help from the government and further industry consolidation to prevent further bankruptcies.

As many as 26 US steel firms that have been forced to file for bankruptcy in the US since 1998.

The International Trade Commission has recommended that President George W Bush give up to four years of import relief, which could include tariffs of up to 40% on some types of steel.

But some firms have complained that this amounts to bailing-out failed companies within the fragmented industry.

 WATCH/LISTEN
 ON THIS STORY
The BBC's Alison Gee
"The industry is in crisis"
See also:

05 Dec 01 | Business
US steel giants eye merger
22 Jul 01 | Business
Thousands more Corus jobs 'at risk'
31 Aug 01 | Business
US steelmakers stoke trade war
07 Jun 01 | Business
Slowdown fuels US steel aid
06 Jun 01 | Business
EU opens attack on US steel probe
05 Jun 01 | Business
Bush seeks steel probe
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