Reportedly, Nippon Steel and Sumitomo Metals are seeking to merge to become the world's second largest steel company.

It’s said that the two companies are likely to cooperate with Indian Tata Steel for the long standing ally.

Besides, they may compensate the second partner, Bhushan Steel to avoid possible project duplication and competition issues.

Negotiation is ongoing within the four parties; however, it is not concluded.

Meanwhile, Bhushan Steel, working together with Sumitomo Metals for six years is still waiting the decision from Sumitomo Metals for further cooperation on the six million tons JV steel plant in West Bengal.

In addition, Tata Steel and Nippon Steel signed a joint venture agreement in this January to build a facility for making auto-use cold rolled steel at Jamshedpur, in where Tata Steel will hold 51% of stake and Nippon Steel will take 49%.