Japanese metallurgists announce cost reduction by almost three billion dollars

The three largest Japanese manufacturers were Nippon Steel & Sumitomo Metal Corp, JFE Holdings Inc and Kobe Steel LTD announced a reduction in expenses by $ 275 billion or 2 billion 700 million dollars this year. The impetus for the adoption of such radical measures was an excessive offer of steel on world markets that caused a drop in prices for metal products and a decrease in the profit of metallurgical companies.

Nippon Steel & Sumitomo, created in October last year by the confluence of the Nippon Steel Corp and Sumitomo Metal Industries LTD, declares the intention to save 150 billion yen by reducing their expenses due to the integration of these two companies, its executive director Katsushiko Ota today reported. JFE Holdings Inc will cut its appetites per 100 billion yen, and Kobe Steel LTD at 25 billion.

One of the sources of cost reduction in metallurgical companies in Japan see the use of cheaper and low -grade iron ore raw materials and coal. A undoubted plus will also be a decrease in the 21 percent of the yen in relation to the dollar, which makes the Japanese metal distribution more attractive than the products of Asian metallurgists.

Japanese metallurgists could not until this time draw up a clear forecast for profit, explaining the uncertainty by the fact that raw prices remain not regulated and customer prices are still not over.

Nippon Steel & Sumitomo began its production activities with losses that amounted to 124 billion 600 million yen, which is slightly less than a forecast level of 140 billion yen, which was predicted by market analysts. At the same time, a decrease in loss-making occurred only due to the weakening of the course of the yen.

JFE Holdings Inc in the wake of reducing the yen rate and rigid savings inside the company recorded a net profit of 17 billion 600 million yen, and Kobe Steel LTD predicts 35 billion yen.

The export of steel to ASEAN remains relatively strong, but in general the market of steel products was lethargic, and steel factories in South Korea and China continued to supply large volumes of metal rolling, which led to the weakening of the balance and supply balance in the East Asian market.