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Nippon Steel, JFE eye record profits in FY04

TOKYO - Major steel makers Nippon Steel Corp and JFE Holdings Inc both project record group pretax profits for this fiscal year, due to higher prices on the back of the growing global demand for steel.

Nippon Steel expects consolidated pretax profit to jump 45% on the year to 250 billion yen (US$2.2 billion) for the year through March 31, 2005, to mark a record for the first time in 15 years. The initial projection was 200 billion yen.

Overall sales are seen rising 9% to 3.2 trillion yen on brisk sales of high-quality steel to auto makers, shipbuilders and electrical machinery manufacturers. In addition, prices of exports to Asia, which make up 30% of the total, have been rising.

Because of such factors as a blackout at its Nagoya steel works in June, Nippon Steel expects crude steel output to be about 30 million tons, short of the initial plan by roughly 400,000 tons. But with the tight supply-demand situation in steel materials, price hikes for large customers are expected to go smoothly in the fiscal second half and afterward.

JFE on Monday lifted its group pretax profit projection for the current year by 120 billion yen. It now expects the figure to be 400 billion yen, a surge of 83% on the year and a record for the second consecutive year.

Despite rises in prices of raw materials, the company expects that hiking sales prices and shifting to high-grade products will yield about 100 billion yen in additional profit.

(Asia Pulse/Nikkei)

Sep 1, 2004

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