All three major Japanese steelmakers plunged into the red in the April-June quarter as the coronavirus crisis led automakers and other clients to suspend production, dragging down demand.
JFE Holdings Inc. reported a group net loss of ¥39.1 billion on sales of ¥743.9 billion, down 19.8 percent from the previous year, for the first quarter of fiscal 2020.
For the full year through March 2021, JFE expects to post a net loss of ¥100 billion, would be its second big loss in a row.
The company is in “a tougher business environment than anything experienced before,” President Koji Kakigi said in a teleconference.
JFE Holdings will slash ¥100 billion in costs and consider launching structural reforms earlier than scheduled, including a plan to shut down a blast furnace at its East Japan Works’ Keihin site in Kawasaki in fiscal 2023.
In the meantime, the company expects demand from automakers to recover in the second half from October this year. This month, it will prepare to restart a blast furnace at West Japan Works’ Fukuyama site in Hiroshima Prefecture.
Domestic leader Nippon Steel Corp. posted a group net loss of ¥42 billion on sales of ¥1.1 trillion, down 25.7 percent, in the first quarter, with production of crude steel dropping below levels during the 2008 global financial crisis.
Nippon Steel expects to post a loss of ¥200 billion for April-September but did not offer a full-year estimate.
“Demand will not return to levels before the coronavirus outbreak in the second half,” Executive Vice President Katsuhiro Miyamoto said.
Kobe Steel Ltd. meanwhile logged a net loss of ¥13.1 billion on sales of ¥374.1 billion, down 19.4 percent.
Sales dropped both for steel products and construction machinery, and the company said it expects to report its first full-year operating loss.
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