Japan Electric Furnaces Post Favorable Results for F2005

Three of Japanese major 5 electric furnace steel makers posted higher recurring profit for fiscal 2005 ended March 2006. Osaka Steel posted second high recurring profit after the record in fiscal 1991, Godo Steel posted 3rd high profit and Tokyo Steel Manufacturing posted 4th high profit. The higher steel price lifted their profit though the increase was narrower than 15,000-25,000 yen per tonne of increase in fiscal 2004. They expect lower recurring profit for fiscal 2006 from fiscal 2005 due to the higher cost for raw materials and freight. Godo Steel announced on Wednesday the consolidated recurring profit increased by 39.2% to 19.563 billion yen for fiscal 2005 from fiscal 2004. JFE Bars & Shapes’ averaged steel selling price increased by 13.1% or 7,500 yen to 64,800 yen per tonne in fiscal 2005 from fiscal 2004. The price increased by 13% or 7,300 yen to 63,800 yen for Godo Steel and by 4.5% or 2,700 yen to 62,200 yen for Osaka Steel while Tokyo Steel’s selling price decreased by 2.9% or 2,500 yen to 66,900 yen due to lower hot rolled coil price under slump in Chinese market. They reduced steel products sales with output reduction to keep and improve the selling price in fiscal 2005 from fiscal 2004. Tokyo Steel’s sales volume decreased by 7.2% to 3.12 million tonnes and Godo Steel reduced the volume by 3.2% to 1.42 million tonnes. Osaka Steel also reduced the output by 1.1% to 1.2 million tonnes. They kept high level profit in fiscal 2005. The recurring profit on sales was 32.5% for Yamato Kogyo, 27.8% for Tokyo Steel, 13.2% for JFE Bars & Shapes, 17.1% for Godo Steel and 18.9% for Osaka Steel. The accumulated profit increased to 144.4 billion yen for Tokyo Steel, 115.3 billion yen for Yamato Kogyo, 71.7 billion yen for Osaka Steel and 28.6 billion yen for Godo Steel. The all 5 major makers expect lower recurring profit for fiscal 2006 from fiscal 2005 when electricity increased in April due to surging oil price and cost for ferroalloys and subsidiary materials increase.