Japan 4 Major Stainless Makers Post Recurring Losses in F2009

Japanese 4 major stainless steel makers, Nisshin Steel, Nippon Yakin Kogyo, Nippon Kinzoku and Nippon Metal Industry posted consolidated recurring losses for 2 financial years in a row. The largest stainless steel maker, Nippon Steel & Sumikin Stainless Steel (NSSC) recovered annual recurring profit. The 5 makers increased the export mainly for Asia in the second half year of fiscal 2009 (October 2009-March 2010) and their operation rate exceeded 80% in January-March 2010 compared with the ordinary level. Their business performances are improving. 3 makers estimate to recover annual profits in fiscal 2010 ending in March 2011 though management circumstances are unclear due to rough fluctuation of nickel price and yen exchange rate.

NSSC and Nippon Kinzoku recovered their profits rapidly in the second half of fiscal 2009 thanks to demand recovery from automobiles. On the contrary, Nippon Metal Industry and Nippon Yakin Kogyo posted larger losses in the second half year from the first 6 months due to stagnant demand for building materials. Nippon Metal Industry and Nippon Yakin Kogyo tried to increase export of high performance products to Asia in competitions with large stainless makers in China and South Korea.

Annual shipment of stainless steel products decreased by 7.9% to 758,000 tonnes by 7.9% at NSSC in fiscal 2009 from fiscal 2008. The annual shipment of Nippon Yakin Kogyo lowered by 3.6% to 214,000 tonnes. Nippon Kinzoku’s shipment decreased by 6.3% to 41,000 tonnes while Nisshin Steel’s shipment increased by 14.9% to 540,000 tonnes.

Stainless steel market price is rising in Asia due to dramatic increase of nickel price. It is the point whether Japanese makers can pass rising raw material costs on the selling price of stainless products during the first 6 months of fiscal 2010.