Posted on 28 Oct 2011
Japan’s top steelmakers, Nippon Steel Corp and JFE Holdings Inc, slashed their full-year profit outlooks by about 20%, hit by a rapid deterioration in Asia’s steel market after booking quarterly earnings about half of last year’s levels.
Ebbing demand in China, the world’s biggest consumer and producer, and an uncertain global economy, are weighing heavily on the profits of Asian steelmakers already reeling from a supply glut and sagging regional prices.
Japanese steelmakers, heavily exposed to Asia’s steel market, face an even tougher outlook due to a strong yen and prices that are expected to fall further in the export market.
The glum outlook follows POSCO’s announcement last week that the South Korean steelmaker will cut its 2011 investment plan and its October-December operating profit may fall.
Nippon Steel, the world’s No. 4 steelmaker, slashed its outlook for recurring profit for the year to March 2012 to 180 billion yen (US$2.38bil) from its projection of 230 billion yen only three months ago.
