Japan Welded Tube Makers’ Profits Drop in F2008

Consolidated recurring profits of Japanese 5 major welded steel tube makers decreased in fiscal 2008 ended in March 2009 compared with fiscal 2007. They raised the selling price in the first half of fiscal 2008 due to rising material costs. However, the demand for electric resistance welded steel tube dropped down from manufacturing industry in the second half year. Only JFE Welded Pipe gained consolidated recurring profits through fiscal 2008.

They passed higher steel coil cost on the selling price of common steel tube for April-September 2008. However, the demand significantly dropped from automobiles, construction machines and industrial machines as well as building materials for October-March. The makers were forced to reduce the output by 30-40% year-on-year in the second half year. Some makers decreased the selling price. Moreover, their sales of stainless steel tube decreased due to conservative buying of users, and the market price of stainless steel tube dropped along nickel price down.

Consolidated sales of Japanese 3 major welded steel tube makers, Maruichi Steel Tube, JFE Welded Pipe and Nittetsu Steel Pipe, increased in fiscal 2008 from fiscal 2007. The sales of Sumitomo Pipe & Tube, Mori Kogyo and Araya Industry decreased. Consolidated recurring profits of 5 major makers decreased while that of JFE Welded Pipe increased. Araya Industry fell into the red.

The 6 makers widen the output reduction rate for April-June compared with the last half of fiscal 2008. Their selling price is expected to lower along raw material price down. Inventory evaluation loss will generate, too. Maruichi Steel Tube and Mori Kogyo forecast their recurring profits decrease in fiscal 2009. Sumitomo Pipe & Tube forecasts recurring loss in fiscal 2009. Araya Industries tries to shrink recurring loss. Nittetsu Steel Pipe and JFE Welded Pipe postponed the account forecast announcement but they aim to gain recurring profits.