Tokyo, July 31: Japan's Nippon Steel Corp said on Monday that nothing had been decided on a reported comprehensive alliance with Korea's Pohang Iron and Steel Corp (POSCO) The Japanese financial daily Nihon Keizai Shimbun reported that the world's two biggest steelmakers were entering the final stages of talks on a business alliance that could include overseas joint ventures, e-commerce, joint raw material procurement and basic research and development.Their aim was to boost global competitiveness, it said. "Nothing has yet been decided," Nippon Steel said in a statement. POSCO became the world's biggest steelmaker in 1998 surpassing Nippon Steel, although capacity remained below that of Nippon. Combined output capacity at the two firms totalled 50 million tonnes in 1999, or a seven percent share of the global market.
In 1998, the two firms said they agreed to take a minority stake, or one to two percent in each other, to cement their ties. Although Nippon Steel at that time called the capital alliance symbolic and said it might not develop into new tie-ups in global steel production or pricing. Nippon Steel says it now holds about a 0.5 percent stake in POSCO.
The two firms have in the past forged an alliance on technical development and have jointly participated in a steel project in Thailand. The newspaper report failed to inspire traders, with shares in Nippon Steel sliding four yen to 210 yen. POSCO shares were up 4,000 won at 88,000, helped by last week's solid half-year earnings announcement.
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