Key facts
- Nippon Steel raised its full-year net profit forecast to 290 billion yen ($1.84 billion).
- The company reported a first-quarter net profit of 75.30 billion yen.
- Nippon Steel's U.S. Steel unit drove group earnings.
- The forecast for U.S. Steel's business profit was raised to 180 billion yen or more for FY2027.
- The U.S. hot-rolled coil market assumption was raised to $1,000-$1,100 per short ton.
Japan's top steelmaker, Nippon Steel, has significantly boosted its full-year net profit forecast by 32% to 290 billion yen ($1.84 billion). This upward revision is primarily attributed to stronger earnings from its U.S. Steel unit, benefiting from a firmer U.S. steel market and operational efficiencies implemented after the acquisition.
For the first quarter ended June, Nippon Steel reported a net profit of 75.30 billion yen, a substantial recovery from a 195.83 billion yen net loss a year earlier, which was impacted by a one-off loss from the sale of its stake in the AM/NS Calvert joint venture.
Chief Financial Officer Takahiko Iwai stated that U.S. Steel's performance was the main driver of the group's earnings. The company also raised its underlying business profit forecast for U.S. Steel for the fiscal year ending March 2027 to 180 billion yen or more, up from a previous estimate of 100 billion yen or more. Additionally, Nippon Steel increased its full-year assumption for the U.S. hot-rolled coil market prices to $1,000-$1,100 per short ton, reflecting recent price increases.
Further contributing to the revised forecast are expected increases in inventory valuation gains, fueled by the weak yen against the U.S. dollar and rising raw material costs. However, the Middle East conflict is projected to negatively impact full-year earnings by 60 billion yen, following a 25 billion yen reduction in the first quarter.
With domestic operations showing stagnant profits, Nippon Steel plans to pass on higher raw material and fuel costs to customers. Iwai noted the Japanese government's imposition of anti-dumping measures, expressing hope that these will help curb cheap steel imports and potentially strengthen domestic prices.