Business / Corporate

Sumitomo Metal Mining cuts profit target as China demand slows

Bloomberg

Sumitomo Metal Mining Co., the largest domestic nickel producer, cut its first-half profit forecast as China’s slower demand weakens commodity prices more than anticipated, the company said in a statement Friday.

Net income is expected to fall to ¥45 billion for the six months to Sept. 30, down 19 percent from a year earlier and below its May estimate of ¥46 billion.

Sales are pegged at ¥465 billion, unchanged from its previous forecast, while its operating profit target was cut by 5.5 percent to ¥52 billion. The company kept its full-year earnings guidance.

Nickel and copper prices are suffering from slowing growth in China, the company said. Last month, it reversed its outlook for the global nickel market to predict a surplus of 12,000 metric tons in 2015, compared with its April forecast for a 5,000-ton deficit.

For the first three months of the financial year to March, Sumitomo Metal reported a 42 percent gain in net income and a 25 percent increase in operating profit, as a weaker yen and increased sales helped offset the slump in commodity prices.