Japan Major Steel Makers’ Recurring Profits to Increase Slightly in F2011

Japanese most major steel makers forecast consolidated recurring profit would slightly increases for fiscal 2011 ending in March 2012. Sumitomo Metal Industries expects the profit increases to about 3 times of fiscal 2010. However, other steel makers, Nippon Steel, Hitachi Metals, Godo Steel, Yamato Steel and Tokyo Steel Manufacturing expect slightly profit increase when domestic demand decreases. JFE Holdings, Daido Steel and Aichi Steel forecast the profit decreases. Integrated steel makers and special steel makers are expected to revise up profit target when domestic automobile output is recovering rapidly form Great East Japan Earthquake damage. However, the steel makers should take radical measures to expand overseas business or to increase cost competing power for the recovery of the profit.

As for results in April-June, 3 integrated steel makers, Nippon Steel, JFE Holdings and Kobe Steel decreased the consolidated recurring profit from same period of last year while 3 special steel makers, Sanyo Special Steel, Mitsubishi Steel Mfg and Nippon Koshuha Steel increased. Eleven electric furnace steel makers of 12 makers, which produce mainly carbon steel, increased the profit such as Tokyo Steel returned black ink.

Four integrated steel makers except Sumitomo Metals forecast the profit decreases for April-September from the same period of last year when the profit dropped largely in April-June and high raw material cost affects the result. As for special steel makers, Hitachi Metals, Daido Steel and Aichi Steel forecast the profit decreases. Electric furnace steel makers would maintain upward trend for the profit due to low ferrous scrap price for April-September.

Sumitomo Metals forecasts the reccuring profit increases by 3 times to 100 billion yen and Nisshin Steel increases by 30% to 24 billion yen in fiscal 2011 while Nippon Steel forecasts the profit is left unchanged at 230 billion yen. JFE Holdings and Kobe Steel forecast the profit decreases by 20% to 130 billion yen and 40% to 50 billion yen, respectively.