Japan 6 Special Steel Makers Gain Higher Sales and Profits for April-June

Japanese major 6 special steel makers posted year-on-year higher consolidated sales and profits for April-June. Their sales volume increased thanks to output recovery at automobile and construction machine makers. Stable business circumstance is expected to continue in July-September. Four makers of Hitachi Metal Industries, Daido Steel, Sanyo Special Steel and Aichi Steel revised up their outlook for full-year financial results. Meanwhile, special steel makers are concerned about demand condition in the last half of fiscal 2010 when Japanese government decided to end a stimulus measure for eco friendly cars at the end of September.

The 5 makers’ production level recovered to around 80% in April-June compared with the peak level in the first half of fiscal 2008. Most makers entered full operations in and after April. Three-month net sales increased by 2.2 times year-on-year at Sanyo Special Steel and by 2.1 times at Mitsubishi Steel Mfg. Sanyo Special Steel’s sales increased by 16% even compared with January-March 2010. The quarterly sales recovered to 72% of April-June 2008 at Hitachi Metals and Daido Steel, 76% at Sanyo Special Steel and 79% at Aichi Steel.

Hitachi Metals forecasts full-year recurring profit at less than triple of April-June result. Sanyo Special Steel estimates less than 4 times of April-June and Aichi Steel forecasts about triple of April-June. Special steel demand may slow down in the second half of fiscal 2010 when Toyota Motor is expected to decreases car production in and after October. On the other hand, offshore market is expanding.Japanese special steel makers are trying to follow strong demand growth in emerging countries through operative expansions or alliances with offshore steel makers.