Japan 6 Special Steel Makers Post Losses in Fiscal 1H

Japanese major 6 special steel makers posted lower consolidated sales and recurring losses for the first half year of fiscal 2009 (April-September) from the same period of fiscal 2008. Demand for special steel shrank since last autumn and the makers’ constant cost increased. The demand rebounded from automobiles but still keeps low for tool steel.

The 6 makers forecast they could recover recurring profits for the last half of fiscal 2009 along the output increase for automobiles. Hitachi Metals and Sanyo Special Steel forecast they could turn into the black. Mitsubishi Steel Mfg forecasts the recurring profit at zero. The other 3 makers expect to narrower recurring losses.

The 6 makers’ consolidated sales decreased by 44-61% year-to-year for April-September. The sales of special steel business units lowered by 43.9% to 88.5 billion yen at Hitachi Metals, by 55% to to 85.7 billion yen at Daido Steel, by 52% to 37.2 billion yen at Aichi Steel, by 60.9% to 37.1 billion yen at Sanyo Special Steel. Mitsubishi Steel’s sales lowered by 80.8% to 8.1 billion yen while Nippon Koshuha Steel’s sales decreased by 52.1% to 10.6 billion yen.

Overseas sales decreased by 40.7% to 84.7 billion yen at Hitachi Metals, by 48.9% to 11.2 billion yen at Aichi Steel and by 68.4% to 5.6 billion yen at Sanyo Special Steel. Mitsubishi Steel’s sales lowered to 3.6 billion yen. Nippon Koshuha Steel’s sales shrank by 41.2% to 1.8 billion yen.

The all makers posted recurring losses for April-September due to decreasing sales volume, rising cost and dropping sales price. Hitachi Metals and Aichi Steel decreased the half year dividend. The other 4 makers don’t distribute the dividend.

The 6 makers estimate lower sales for full fiscal 2009 compared with fiscal 2008. Daido Steel, Aichi Steel and Nippon Koshuha Steel would get into the red. Hitachi Metals would decrease the yearly dividend. The other 5 makers haven’t decided the yearly dividend policy yet.