Higher Input Cost Suffers Japan Special Steels’ Results

Hitachi Metals and Mitsubishi Steel Mfg posted record consolidated recurring profit in the first half year to September while 3 special steel makers including Daido Steel, Aichi Steel and Nippon Koshuha Steel posted lower recurring profit from same period of last year. Hitachi Metals and Mitsubishi Steel Mfg gained from higher steel selling price and cost reduction. Four special steel makers of major 6 special steel specialized makers expect lower full year profit for the year ending March 2009 from previous year.

The 6 major special steel makers reported the consolidated sales increased in the first half year from same period of 2007 due to higher selling price and sales volume. Their steel units’ sales also increased.

Their higher selling price contributed to the recurring profit in the first half. Daido Steel reported 11.6 billion yen of gain from the higher selling price compared with same period of 2007. The gain was 9.3 billion yen for Aichi Steel and 12.1 billion yen for Sanyo Special Steel. However, they also reported negative impact from higher cost for raw materials and energy. The negative impact was 17.2 billion yen for Daido Steel, 11.6 billion yen for Aichi Steel and 10.7 billion yen for Sanyo Special Steel.

The 6 makers expect the sales renew record for the full year to March 2009. Hitachi Metals and Mitsubishi Steel expect the profit also renew the record. However, other 4 makers expect higher raw materials cost will reduce the profit for the full year from previous year.