Japan Major Welded Steel Pipe Makers Post Better Result in F2010

Japanese major 6 welded steel pipe makers posted better sales and profit for fiscal 2010 ended March 2011 from fiscal 2009 due to higher pipe sales mainly for manufacturing and inventory valuation profit from higher raw material cost. Araya Industrial, Nittetsu Steel Pipe and JFE Welded Pipe Manufacturing returned to profitability while they posted loss for fiscal 2009.

Japanese demand of steel pipe was still under recovery for structural steel pipe, square pipe and other construction applications for fiscal 2010. However, the demand increased for mechanical tube used for automobile and construction machinery from fiscal 2009, when the demand was impacted by global recession. The demand for welded stainless pipe demand was firm for automobile despite slower shipment for construction.

Inventory valuation profit also contributed to the pipe makers’ better results when higher raw materials cost encouraged inventory building purchase by the buyers. Sumitomo Pipe & Tube and Maruichi Steel Tube also gained higher profit from their overseas subsidiaries.

The market condition is still uncertain for fiscal 2011 due to uncertain damage from the major earthquake on the economy. The makers try to increase the selling price to cover higher material coil cost. Their shipment should decrease in the first half year as very slow automobile production. Sumitomo Pipe & Tube, Nittetsu Steel Pipe and JFE Welded Pipe Manufacturing failed to disclose earning forecast for fiscal 2011. Mory Industries and Araya Industrial estimate lower sales and recurring profit from fiscal 2010 while Maruichi Steel Tube expects higher result due to sales increase in Asia.