Nippon Steel & Sumitomo Metal Corp. and JFE Holdings Inc. cut their profit forecasts for the year as the nation¡¯s top two producers respond to a global supply glut spurred by unprecedented Chinese exports.
Japan¡¯s steel companies are battling against falling prices on export markets, as China, which accounts for about half of global output, ships its excess overseas. The chairman of Japan¡¯s Iron and Steel Federation said last week that China¡¯s inability to soak up all the metal it produces due to slowing growth constitutes the biggest risk facing the steel industry. About 40 percent of Nippon Steel¡¯s revenues came from exports last year.
The world¡¯s biggest producer by market value said it now expects net income for the year through March at ?180 billion ($1.49 billion), from a previous forecast of ?260 billion, citing ¡°extremely tough conditions¡± on overseas markets.
JFE Holdings, Japan¡¯s no. 2 mill, halved its current profit forecast to ?100 billion.
With your current subscription plan you can comment on stories. However, before writing your first comment, please create a display name in the Profile section of your subscriber account page.