Japan Major Electric Furnaces Post Lower Profit for F2007

Fourteen electric furnace steel makers out of major 15 makers posted lower recurring profit for the year ending March 2008 from previous year while Yamato Kogyo posted higher profit. Nine of them posted more than 25% lower profit when they failed to cover higher cost for ferrous scrap and ferroalloy through the price hike. Some makers lost money for January-March. Many of them expect lower profit for the year ending March 2009.

Topy Industries announced on Thursday the consolidated recurring profit decreased by 15% for the year ending March 2008 from previous year. The firm posted 46.6% lower operating profit at 4.9 billion yen for steel business. Tokyo Tekko also posted on the day 33.7% lower profit due to 10,000 yen per tonne higher scrap cost.

Scrap price increased by more than 10,000 yen per tonne in the year ending March 2008. The price is around 65,000 yen compared with 40,000 yen per tonne at end of 2007. Many makers expect the price is averaged 63,000-65,000 yen for the year ending March 2009.

Tokyo Steel Manufacturing reported the steel selling price increased by 12% to 75,500 yen per tonne for the year ending March 2008 from previous year. The price increased by 13% to 70,667 yen for Godo Steel and by 10% to 73,100 yen for JFE Bars & Shapes. Tokyo Steel expects the price reaches 106,000 yen for the year ending March 2009.

Yamato Kogyo gained 38.6 billion yen from offshore equity method affiliates in the year ending March 2008 while the Japanese operation posted lower profit from previous year. The firm expects the consolidated recurring profit decreases due to higher yen rate for the year ending March 2009.

See attached table.