Japan Electric Furnaces to Decrease Profit for F2006

Seven of Japanese major 8 electric furnace steel makers decreased recurring profit for fiscal 2006 ended March 2007 except Yamato Kogyo. 7 makers’ profits decreased by 30-40% due to increasing ferrous scrap price. Yamato Kogyo posted higher recurring profit thanks to positive earnings of Nucor Yamato Steel Company which is joint company with Nucor in USA. Most makers advanced their selling price hike. However, their price hike is expected to have an effect to their profit in fiscal 2007. One of biggest electric furnace makers, Tokyo Steel Manufacturing and Yamato Kogyo forecast ferrous scrap purchasing price would be near 40,000 yen per tonne in fiscal 2007. It seems that each maker’s operation environment would continue to have hard situation.Ferrous scrap purchasing price of Yamato Kogyo increased by average about 6,000 yen per tonne in fiscal 2006 from fiscal 2005. The price of JFE Shape & Bar Steel increased by 5,700 yen in Kashima works, and of Godo Steel increased by 5,100 yen. Steel products price of Tokyo Steel slightly increased by 0.7% to 67,400 yen per tonne in fiscal 2006 from fiscal 2005. The firm’s sales volume decreased to 3.08 million tonnes by 1.2%. Moreover, the firm’s profit came under the influence of increasing ferrous scrap price and hardship to obtain for ferrous scrap.Each maker’s business performance is expected to have a hard time in fiscal 2007 at the ended of March 2008. Their rebar shipment prices achieved to 60,000 yen per tonne in April. While ferrous scrap purchasing price keeps at 35,000-36,000 yen per tonne for H2. Many makers’ leaders said it is hardly hope ferrous scrap price decreases largely.Tokyo Steel and Yamato Kogyo think to enhance to improve their selling price.