Japan Major 8 Smelters Post Better 1H Results

Japanese major 8 nonferrous smelters posted better results for first half year of fiscal 2010 started April than same period of fiscal 2009 by Thursday when metal prices kept high level and the demand was strong for automobile and semiconductor. However, many of them reported lower profit in July-September from April-June. Many of them revised the full year targets upward while they are still cautious for potential downward risks including higher yen rate and demand slowdown.

The major 3 makers including Mitsubishi Materials, JX Nippon Mining & Metals and Sumitomo Metal Mining posted wider profit gain for the first half from same period of fiscal 2009. Mitsubishi Materials posted 18.1 billion yen of recurring profit for metals unit under higher copper price and demand while the unit posted 4.3 billion yen of loss for the same period of fiscal 2009. JX Nippon Mining & Metals posted 2 times of recurring profit due to higher copper price and higher profit from investment in Chilean copper mine. Sumitomo Metal Mining posted 70% higher recurring profit due to higher sales volume for copper and nickel.

Zinc smelters apparently experience severe business condition. They posted inventory valuation gain for fiscal 2009 due to continuous price increase through the year. The smelters cannot gain from the inventory when zinc ingot price decreased by near 40% from April to June 2010 and managed to recover April price level in September. Toho Zinc posted 7% lower recurring profit in the first half from same period of fiscal 2009.

Mitsui Mining & Smelting expects the recurring profit will halve for metals, minerals and environmental engineering unit for fiscal 2010 from fiscal 2009. Toho Zinc expects the recurring profit decreases by 35%. Higher yen rate also impacts on the smelters’ results.