Higher Cost Suffers Japan Major Nonferrous Smelters

Japanese 6 nonferrous smelters out of major 8 firms posted lower profit for the year ending March 2008 from previous year due to higher ore and materials cost while Sumitomo Metal Mining and Mitsubishi Materials posted record profit. The smelters expect lower recurring profit for the year ending March 2009 due to higher ore and materials cost and higher yen rate.

Sumitomo Metal Mining posted record recurring profit for the year ending March 2008 due to 58% higher gain from equity method profit from offshore mines. The recurring profit for sales was around 20%, which was much higher than other smelters.

Nippon Mining Holdings posted 91.9 billion yen of equity method profit for the year ending March 2008, which represented around 50% of 192 billion yen of recurring profit. However, the firm reported 14.9 billion yen of negative impact from higher ore cost.

The higher ore cost suffers the smelters more for the year ending March 2009. Mitsubishi Materials and Sumitomo Metal Mining expect more than 20% lower recurring profit.

Mitsubishi Materials gained from investment for cemented carbide products and polycrystal silicon for the year ending March 2008. Furukawa posted higher profit for machinery unit from previous year. However, Mitsui Mining & Smelting posted 26% lower profit for intermediate materials unit.

See attached table.