Japan Major Steels Raises Profit Targets for F2008

Japanese steel makers expect higher profit for the year ending March 2009 than expected earlier when the steel selling price increases mainly for export and input cost decreases for ferrous scrap and energy. Sumitomo Metal Industries revised the outlook upward to 300 billion yen for the year ending March 2009, which is 0.6% higher than previous year and 50 billion yen higher than previous outlook. Kobe Steel revised the outlook upward to 160 billion yen, which is 1.3% higher than previous year and 10 billion yen higher than previous outlook. The major steels try to cover the higher cost through higher selling price and cost reduction.

Nippon Steel revised the full year outlook upward to 560 billion yen of consolidated recurring profit for the year ending March 2009, which is 0.7% lower than previous year but 110 billion yen higher than original estimate. JFE Steel also revised the outlook upward to 500 billion yen, which is 0.6% lower than previous year and 50 billion yen higher than previous outlook.

Sumitomo Metals announced on Thursday the annual results will be better than previous forecast when the firm revised the year to year cost up estimate for raw materials and energy downward to 397 billion yen from former 457 billion yen. The firm expects the year to year gain from higher price will be 302 billion yen while the firm expected to be 287.5 billion yen before.

Kobe Steel announced on Thursday the annual profit is better than expected for the full year when the firm revised the year to year cost up estimate for raw materials and energy downward to 240 billion yen from former 260 billion yen. The firm expects the year to year gain from higher selling price is 218 billion yen compared with former 204 billion yen.

Sumitomo Metals reported the consolidated recurring profit decreased by 0.7% to 151.7 billion yen for the half year to September from same period of 2007. The averaged selling price increased by 13,000 yen to 118,600 yen per tonne during the period. The firm expects the price will increase to 123,000 yen for the full year.

Kobe Steel reported the consolidated recurring profit increased by 12.7% to 85.5 billion yen for the half year from same period of 2007. The averaged steel selling price increased by 19,000 yen to 96,400 yen per tonne.