Skip to main content

Advertisement

Advertisement

Business

Nippon Steel boosts profit outlook again on robust demand

Nippon Steel boosts profit outlook again on robust demand

FILE PHOTO: A logo of Nippon Steel & Sumitomo Metal Corp is pictured outside its headquarters in Tokyo November 9, 2012. REUTERS/Yuriko Nakao

TOKYO: Japan's top steelmaker, Nippon Steel, on Tuesday (Oct 2) lifted its annual net profit outlook by 41per cent as robust global demand boosted prices of steel products and higher prices of iron ore and coking coal caused hefty appraisal gains on its inventory.

The move follows its upward revision in August.

Net profit for the year to Mar 31 is now predicted at 520 billion yen, which will mark the highest since its acquisition of Sumitomo Metal Industries in 2012. Its previous guidance was 370 billion yen.

The revised prediction came higher than a mean 416 billion yen profit based on forecasts from 8 analysts, Refinitiv data shows.

"We are making steady progress towards building a profit structure capable of generating a stable profit regardless of the external environment," Vice President Takahiro Mori told reporters.

Boosting product prices for its domestic customers and improving profit of its overseas units also contributed, he said.

Nippon Steel aims to adopt a new pattern for semi-annual price negotiations of term contracts with local industry customers from next April and is in talks with them, Mori said.

Japanese steelmakers and their key customers such as automakers and electronics makers negotiate the prices of steel products under term contracts twice a year. However, the decisions come after the suppliers start shipping products, putting them at a disadvantage because they cannot negotiate on volume and price together.

"We are getting a better understanding from our customers," Mori said.

In October, Nippon Steel filed patent infringement lawsuits in a Tokyo district court against Toyota Motor Corp, along with China's Baoshan Iron & Steel Co Ltd (Baosteel), creating tension between the two Japanese industry giants.

"Toyota is one of our most important customers and we'd like to keep a good relationship," Mori said, without commenting on any further details of the legal case.

Source: Reuters

Advertisement

Also worth reading

Advertisement