Japan 6 Special Steel Makers’ Net Profits Largely Improve in F2010

Japanese 6 major special steel makers’ net profits improved for the business year ended in March 2011. Hitachi Metals and Aichi Steel’s net profits increased in fiscal 2010 from fiscal 2009. The other 4 makers’ income profit and loss moved into the black. Special steel sales increased largely thanks to the recovery of car production. Special steel makers could also raise the selling prices against raw material cost upsurge. 5 makers didn’t announce financial forecasts for fiscal 2011 since the demand situation is unclear due to influences of Japan Earthquake. Meanwhile, they expect special steel production could recover in the second half year.

Daido Steel’s sales volume increased by 34.1% to 1.22 million tonnes for special steel products in fiscal 2010 from fiscal 2009. Aichi Steel’s sales volume increased by 33.9% to 822,000 tonnes for special steel products. Nippon Kosyuha Steel’s sales volume increased by 39.7% to 95,300 tonnes for all products. All 6 makers’ revenues increased year-on-year along sales volume recovery and selling price improvement.

As for Daido Steel, rising raw material price reduced recurring profit by 9.7 billion yen in fiscal 2010 while higher sales volume pushed up the profit by 37.9 billion yen. Sanyo Special Steel’s recurring profit decreased by 10.2 billion yen due to raw material cost upsurge while increased by 21 billion yen thanks to better sales volume and selling price.

Hitachi Metals and Daido Steel posted loss related to the earthquake at each 1 billion yen. Nippon Kosyuha Steel’s profit was also impacted by 160 million yen.

These special steel makers maintained high production level for March-April 2011 while they are concerned the production would decline for May-July when Japanese automobile makers reduce output at overseas factories. The demand would be also slowed down by electricity supply regulation scheduled this summer.