Japan 3 Major Stainless Makers Post Red for Oct-Dec 2009

Japanese major 3 stainless steel makers of 4 makers posted consolidated recurring losses for October-December 2009. The makers tried to recover profits by cost reductions but export margin worsened due to yen exchange rate. The makers are unlikely to gain annual recurring profits for fiscal 2009 ending in March 2010 except for Nippon Steel & Sumikin Stainless Corporation (NSSC). Nippon Yakin Kogyo and Nippon Metal Industry don’t distribute dividends while Nippon Kinzoku plans to pay 1 yen per share.

NSSC’s shipment of stainless products decreased by 20.2% to 186,000 tonnes for October-December 2009 from the previous quarter. Nippon Yakin’s shipment decreased by 11.8% to 45,000 tonnes while Nippon Kinzoku’s shipment decreased by 7.4% to 63,000 tonnes. Their export decreased when Chinese users adjusted the inventory and yen exchange rate strengthened.

Nippon Yakin, Nippon Kinzoku and Nippon Metal Industry forecast they post recurring losses for a full fiscal year ending in March 2010. They would post losses for 2 years in a row. They were suffered from large losses especially in April-June 2009 due to global financial crisis. NSSC gained recurring profit at 1.088 billion yen for April-December 2009.

These makers’ operation rate is 70-80%. The operation recovery is delayed when the demand for nickel series stainless products maintains stagnant due to low construction market in Japan.