Japanese major 5 steel makers except for Sumitomo Metal Industries posted lower consolidated recurring profit or loss for first half of fiscal 2011 started in April from same period of fiscal 2010. Nippon Steel, JFE Holdings and Nisshin Steel revised the full year profit targets downward for fiscal 2011 ending March 2012. The 3 makers and Kobe Steel expect 20-40% lower recurring profit for the year while Sumitomo Metals kept the 100 billion yen of recurring profit target, which is 2.9 times of the profit in fiscal 2010.
The makers expected better domestic demand especially for automobile and rebuilding activity for damaged areas by the major earthquake in second half of fiscal 2011. However, the business condition gets severer due to slowing economy in Europe and USA, slower growth in emerging countries, higher production and export by Chinese and South Korean steel makers, historical high yen rate and Thai flood. Nippon Steel cut the annual recurring profit target by 50 billion yen to 180 billion yen for fiscal 2011, which is 20% lower than fiscal 2010 level. JFE Holdings cut the targets by 30 billion yen to 100 billion yen, which is 40% lower than fiscal 2010 level. Nippon Steel posted 94.2 billion yen of recurring profit for the first half of fiscal 2011, which was 30% lower from same period of fiscal 2010 level and lower than 110 billion yen of target as of July. JFE Holdings posted 50.6 billion yen of the profit, which is 50% lower than same period of fiscal 2010 level and slightly higher than July outlook. Kobe Steel and Nisshin Steel posted lower profit while Sumitomo Metals posted higher profit. Their results were impacted by higher raw materials cost and slower steel selling price improvement along with lower demand after the quake.