Japan Major 5 Steels Post Less Profitable Results for F2009

Japanese major 5 steel makers reported less profitable results for fiscal 2009 ended March 2010 than fiscal 2008 due to worldwide slow economy and lower sales volume and price. JFE Holdings, Nippon Steel and Kobe Steel secured consolidated recurring profit at 69.2 billion yen, 11.8 billion yen and 10.2 billion yen respectively while Sumitomo Metal Industries and Nisshin Steel posted recurring loss for the first time in 10 years for Sumitomo Metals and for 2 years in a row for Nisshin Steel.

The major 5 steel makers expect the sales volume will increase in fiscal 2010 from fiscal 2009 mainly due to strong offshore demand. However, 4 makers except for Sumitomo Metals didn’t disclose profit target for the year when they cannot see steel price and raw materials cost under ongoing negotiation. Their profitability depends on steel price negotiation with contract buyers when major raw materials suppliers seek wide price hike and quarterly pricing system.

Their profitability recovered in January-March. JFE Holdings posted 73.5 billion yen of recurring profit and Nippon Steel posted 55.4 billion yen of profit under growing offshore demand.