Bloomberg reported that Nisshin Steel Co and Nippon Metal Industry Co denied media reports in the Nikkei and Asahi that they are considering merging operations in 2012.

Mr Isao Fujiwara deputy manager at Nippon Metal Industry’s corporate planning department said that a merger isn't under consideration.

Mr Kazuki Kiura spokesman of Nisshin Steel said that the company isn't in talks with Nippon Metal.

The Nikkei and Asahi newspapers, without saying where they got the information, reported that the companies will likely combine operations as early as 2012.

Nippon Metal and Nisshin Steel were suspended from trading in Tokyo after surging 13% and 5.5%, respectively, following the reports. Nippon Metal was last traded at JPY 78 yen as of 1:46 PM local time, while Nisshin Steel was at JPY 116. The benchmark Nikkei 225 Stock Average rose 1.1%.

According to data compiled by Bloomberg, Nisshin Steel is the largest shareholder of Nippon Metal, holding a 5.12% stake as of March 31st 2012.

Mr Hideo Suzuki chairman of Nisshin Steel said in February 2011 that Japanese stainless steelmakers must consolidate to counter rising competition from global rivals.

(Sourced from www.bloomberg.net)