Japan 5 Major Electric Furnaces Post Lower Profit for 1H

Japanese major 5 electric furnace steel makers posted lower recurring profit for the first half year to September from same period of 2005 though Yamato Kogyo posted record recurring profit, according to financial results of major 6 makers. Higher ferrous scrap price reduced the profit as much as 30% while the steel selling price was firm. Nucor-Yamato Steel, which is US joint venture, lifted Yamato Kogyo’s profit. The major 5 without Yamato Kogyo expect lower profit for the full year. Japanese electric furnaces were suffered from higher scrap price. Tokyo Steel Manufacturing reported the purchase price was 25,500-30,000 yen per tonne in the first half compared with 20,000-28,500 yen in same period of 2005. Yamato Kogyo said the purchase price increased by 20%, JFE Bars & Shapes said the price increased by 20.3% or 4,400 yen and Osaka Steel said the price increased by 16.6% or 3,800 yen. Godo Steel reported the price increased by 12.7% or 3,000 yen. Tokyo Steel said the steel selling price decreased by 4.8% or 3,300 yen per tonne in the first half from same period of 2005 when speculative purchase by buyers lifted the market price. JFE Bars & Shapes said the price increased by 2.7% or 1,700 yen and Osaka Steel said the price increased by 1.5% or 900 yen. The domestic steel price was relative higher. They expect the full year profit will decrease by 20-30% from previous year due to higher cost for raw materials. They could post lower profit with smaller margin after they reported record recurring profit in previous year.