Nisshin Steel Co said on Wednesday it had skipped required water pressure and leakage tests on its stainless steel pipes, the third Japanese steelmaker in less than two weeks to admit failing to carry out tests.

Bigger peers Nippon Steel Corp and JFE Steel Corp, a unit of JFE Holdings had made similar admissions.

The statement by Nisshin, Japan's fifth-biggest steelmaker, renewed concern about quality control at Japan's top steelmakers, at a time when they are aggressively expanding production at home and abroad to cope with strong demand and compete with giant ArcelorMittal.

Nisshin shares fell 1.3 percent to close at 394 yen, while Nippon Steel fell 1.2 percent to 652 yen and JFE slipped 1 percent to 5,990 yen. The benchmark Nikkei average rose 1.6 percent.

"The stock market would have reacted more sharply to such a revelation if the steel market was in less favourable condition," said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management.

"I'm closely watching how they'll proceed with improvement measures."    

Nisshin Steel said it had skipped a government required leakage test for 71,756 pipes out of about 2,490,000 it had shipped in the past five years. It had also failed to conduct water pressure tests for 480,665 pipes out of 4,310,000 shipped.

The company said factory managers skipped tests because none of its pipes had failed the tests in the past and they had worried that carrying out the tests would slow production.

There have been no complaints from clients about the quality of the pipes, it said.

Sumitomo Metal Industries Ltd, Japan's top pipe maker, which is strong in high-end pipes used in oil and gas fields, earlier told Reuters it had not found any data fabrication problems in its internal research. - Reuters