Japan's three major steelmakers forecast that their consolidated net profits will decline in fiscal 2025, which will end next March, according to the companies' earnings reports released by Monday.
Nippon Steel and JFE Holdings expect to see product prices fall because of the yen's appreciation as well as a market deterioration caused by overproduction in China. They also assume that their earnings will be negatively impacted by tariff measures introduced by U.S. President Donald Trump's administration.
Kobe Steel projects a profit fall in its electricity business.
Overall net profit is expected to go down 42.9% from the previous year to ¥200 billion at Nippon Steel, 18.4% to ¥75 billion at JFE and 16.8% to ¥100 billion at Kobe Steel.
Assuming that demand for steel materials will diminish as a consequence of a decline in automobile sales caused by Trump's tariff measures, Nippon Steel estimates the U.S. policy's negative impact on its business profit at tens of billions of yen and JFE at ¥12 billion.
"The tariffs came on top of the (overproduction) problem of China. The Japanese steel industry is in a very tough situation," Nippon Steel President Tadashi Imai said, noting that it is difficult to make quantitative predictions.
Kobe Steel plans to reflect the impact of the tariffs in its earnings forecasts when the outlook becomes clearer.
In fiscal 2024, which ended in March this year, Nippon Steel and JFE posted declines in their consolidated sales and significant drops in their net profits, while Kobe Steel saw its consolidated sales and net profit climb partly thanks to its robust construction machinery business.
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