Nippon Steel Improves Earnings Forecasts Again Due To Strong Demand

Japan's largest steelmaker, Nippon Steel Corp 5401.T, boosted its annual net profit forecast by 41% on Tuesday as strong global demand boosted steel product prices and higher prices for iron ore and coking coal boosted prices. its reserves.

This move follows an upward revision in August.

Net income for the year to March 31 is currently projected at 520 billion yen, the highest since the 2012 acquisition of Sumitomo Metal Industries. The previous forecast was 370 billion yen.

According to Refinitiv, the revised forecast was above the average profit of 416 billion yen, based on forecasts of 8 analysts.

“We are making steady progress in building a profit structure that can generate consistent profits regardless of the external environment,” Vice President Takahiro Mori told reporters.

According to him, this was also facilitated by higher prices for products for local consumers and increased profits of foreign divisions.

Mori said Nippon Steel intends to adopt and negotiate a new semi-annual pricing schedule for fixed-term contracts with local industrial customers starting next April.

Japanese steelmakers and their key customers such as auto and electronics manufacturers negotiate fixed-term steel product prices twice a year. However, decisions are made after suppliers start shipping products, which puts them at a disadvantage as they cannot agree on volume and price together.

“We get better understanding from our customers,” Mori said.

In October, Nippon Steel filed patent infringement lawsuits in Tokyo District Court against Toyota Motor Corp 7203.T along with China's Baoshan Iron & Steel Co Ltd (Baosteel), creating tensions between the two Japanese industrial giants.

"Toyota is one of our most important customers and we would like to maintain a good relationship," Mori said, without commenting on any details of the court case.