ArcelorMittal, the world’s biggest steelmaker, today fuelled the wave of foreign investment in the US steel industry with a $240 million expansion plan with Nippon Steel.

The move comes after a wave of heavy investment by Russian steel companies in North America.

ArcelorMittal and Nippon are to build a new galvanising line at New Carlisle, Indiana, doubling the capacity of an existing plant which serves the motor industry.

The investment follows large purchases of steel facilities by the Russian steel companies Evraz and Severstal in recent weeks. Evraz, working with another Russian steel company TMK, paid $4 billion for a Candian steel plate business while Severstal paid $800 million for a steel mill in Baltimore.

Although the US economy is struggling foreign investors are calculating that its demand for steel will hold up because the country has insufficient capacity for its needs.

The new ArcelorMittal/Nippon facility will be completed in 2010 and will have an annual capacity of 480,000 tons. It will create 100 jobs.

ArcelorMittal was recently forced to sell some capacity in the US by competition authorities following the merger that established it as the steel industry’s biggest global player two years ago.

Times Recommends

• Minister in talks with Saudis to protect creditors
• Premier Inn hits back in £29-a-room row
• Bankers hit back at 'populist' bonus supertax