Japan's four major steelmakers said Thursday they are on track to post record earnings for the year through March, citing strong demand from automakers and shipbuilders.
Nippon Steel Corp., the largest domestic maker, said it has raised its net earnings forecast for fiscal 2005 by 45 billion yen to 310 billion yen.
Rising iron ore and coal prices, coupled with high shipping costs, are projected to push down profits by 280 billion yen from the previous fiscal year, but steel price increases and cost cutting more than offset this, the company said.
Firm officials said there is a robust demand for high-grade steel products -- those used for automobiles and consumer electrics.
Sumitomo Metal Industries Ltd. and Kobe Steel Ltd., the country's No. 3 and No. 4 makers, also announced sharp upward revisions to their full-year earnings forecasts, saying strong domestic demand drove up steel prices.
JFE Holdings Inc. left intact its full-year earnings forecast announced in May, but it is expecting strong growth from the previous fiscal year, which would set profit records again if achieved.
Meanwhile, the steelmakers said they are cutting their production of commodity steel products, given the worldwide oversupply.
The world's main markets have been awash with these low-value steel products, used, for instance, as construction materials, after China started boosting steel production capacity.
Nippon Steel officials said the company cut production of commodity steel products by half a million tons from the initial production plan during the first half of the fiscal year, noting it is likely to reduce production by the same amount again in the second half.
However, officials of the steel firms said a large proportion of their products are high-value steel products effectively tailor-made for particular clients, thus oversupply of commodity products does not have much impact on them.