Kobe Steel Reviews Rolled Aluminium Sales 2.5% Downward for F2011

Kobe Steel’s Aluminum & Copper Business Unit reviewed its full-year sales plan of rolled aluminium products (flat and extruded products) downward by 2.5% to 290,900 tonnes against the previous plan for fiscal 2011 ending in March 2012 while the firm reviewed sales plan of copper rolled products (sheets, strips and tubes) upward by 0.1% to 138,700 tonnes. In the second half year (October-March), sales volume of both aluminium and copper products is expected to increase for automobile industry year-on-year while the sales are expected to decrease largely for semiconductor related applications. Kobe Steel also reviewed the business unit’s full-year financial result forecast upward but negative effects of flood in Thailand was not involved yet.

Full-year sales plan for flat aluminium products was lowered by 2.9% to 263,100 tonnes against the previous plan. Sales volume of aluminium extruded products is expected to increase by 0.7% to 27,800 tonnes from the previous plan. Full-year sales plan for copper sheets and strips was reviewed to 55,200 tonnes, 1.6% lower against the previous plan. Copper tube sales volume is expected to increase by 1.2% to 83,500 tonnes.

Sales volume for car related fields is estimated to increase by 10% year-on-year in second half of fiscal 2011 along automakers’ output recovery. On the other hand, sales volume of semiconductor related products has decreased since 2Q when sales of liquid crystal panel TVs and personal computers slowed down. Mr. Tetsu Takahashi, Kobe Steel’s senior managing director, explained sales volume of copper strip for leadframe or aluminium plate for semiconductor manufacturing equipment may drop by around 40% year-on-year in 2H. Sales volume of aluminium can material is also likely to decrease by 5% year-on-year.

Meanwhile, the business unit reviewed full-year net sales forecast 1.6% upward to 315 billion yen and full-year recurring profit forecast 11% upward to 10 billion yen against the previous plan. Sales and profits would increase along upsurge of base metal market prices. However, half-year recurring profit is forecasted to worsen from 7 billion yen in 1H to 3 billion yen in 2H due to extremely strong yen trend, high energy costs and inventory evaluation loss.

In Thailand, Kobe Steel’s copper strip processing subsidiary has suspended operation due to flood. Demand for aluminium blanks for hard discs may drop by 30% or more, indirectly impacted by Thai flood, said Mr. Takahashi. The business unit’s latest financial forecast has not involved negative impacts of Thai flood yet. Revenue for Thailand accounts for 10% in the total sales.