The nation’s major steelmakers on Thursday forecast record earnings for the current fiscal year.
They attributed the positive outlook to continued strong domestic and foreign demand, especially from China, which has kept Japan’s blast furnaces and mills running at capacity.
Nippon Steel Corp., Japan’s No. 1 steelmaker, said it expects a record 170 billion yen net profit for the current fiscal year, on revenue of 3.28 trillion yen.
The company’s updated forecast, like those of its rivals announced the same day, marked a sharp upward revision from its outlook earlier this year.
The company said it expects greater industrywide domestic steel demand than in the previous fiscal year, with annual steel consumption estimated to exceed 70 million tons for the first time in four years.
Demand continues to be solid in all manufacturing fields, including shipbuilding and car manufacturing.
In the current fiscal year, steelmakers are also seeing increased demand from nonmanufacturing sectors, with the notable exception of public works.
The company said a pickup in private capital investment is giving an additional boost to steel demand, as carmakers and consumer-electronics makers build more production facilities.
On the same day, Sumitomo Metal Industries Ltd., the nation’s No. 3 steelmaker, and Kobe Steel Ltd., No. 4, said they expect record figures in some profit categories.
Japan’s No. 2 steelmaker, JFE Holdings Inc., announced its forecast update last month, making a similarly sharp upward revision to its earnings forecast for the current fiscal year.
As steel production has stayed close to capacity, rising prices have been driving up steelmakers’ profits.
For years, steelmakers suffered from a flooded market, which caused fierce price competition. Since then, companies have been trying to survive by downsizing operations and forming a merger and alliances with rivals.
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