Nippon Steel May Beat Earnings Forecast

Nippon Steel, the world's third-largest steel producer, could surpass its own profit forecast for the year until March 31, 2022, as its exports and overseas businesses benefit from strong demand and high steel prices.
“The demand for steel overseas is quite high,” Executive Vice President Takahiro Mori said in an interview.

“As China, which produces almost 60% of the world's steel, intends to reduce its production capacity, the steel market will become even more tense and iron ore prices are likely to fall,” he said.

Global steel demand is expected to rise 5.8% this year, while China plans to cut steel production by 236 million tonnes from 2021 to 2025.

By mid-May, steel and iron ore prices in China rose to all-time highs, fueled by the economic recovery from the pandemic, reduced global liquidity, and speculative buying. They have since backed down as the government tightened checks and controls to tame market enthusiasm.

“Steel prices will stop falling at current levels if demand is strong,” Mori said.

In early May, Nippon Steel forecast business profits of 450 billion yen ($ 4.1 billion) for the year to March next year, up from 110 billion yen a year earlier and the highest since 2014.

“Our overseas earnings are expected to exceed our forecast,” Mori said, without giving any numbers.

Nippon Steel, the world's No. 3 steel producer, could surpass its own profit forecast for the year to March 31, 2022, as its exports and overseas businesses benefit from strong demand and high steel prices, a company executive told Reuters.

“The demand for steel overseas is quite high,” Executive Vice President Takahiro Mori said in an interview.

“As China, which produces almost 60% of the world's steel, intends to reduce its production capacity, the steel market will become even more tense and iron ore prices are likely to fall,” he said.

Global steel demand is expected to rise 5.8% this year, while China plans to cut steel production by 236 million tonnes from 2021 to 2025.

By mid-May, steel and iron ore prices in China rose to all-time highs, fueled by the economic recovery from the pandemic, reduced global liquidity, and speculative buying. They have since backed down as the government tightened checks and controls to tame market enthusiasm.

“Steel prices will stop falling at current levels if demand is strong,” Mori said.

In early May, Nippon Steel forecast business profit of 450 billion yen ($ 4.1 billion) for the year to March next�