Nippon Steel slashes yearly profit forecast by 6 percent on declined output

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Nippon Steel slashes yearly profit forecast by 6 percent on declined output

On Wednesday, the 6th of February, 2019, the Nippon Steel & Sumitomo Metal Corp, the Japan’s largest steelmaker, had rung an alarming bell, saying that their annual profit forecast would be 6 percent less than the initial forecast, cautioning the investors on a declined crude steel output in the financial year ending on March 31st.

According to the steelmaker’s Wednesday’s announcement, the current estimate of their annual profit would sum up to $3.01 billion (330 billion Japanese Yen), 6 percent down from its previous forecast of 350 billion Japanese yen.

Alongside, the world’s third-largest steelmaker, Nippon Steel had also downsized its scale of annual crude output to 41.3 million ton from previous 42.1 million ton, due to troubles in the factories, on a parent basis.

In a news conference, the Executive Vice President of Nippon Steel, Katsuhiro Miyamoto had been quoted saying that the recent trouble could reflect a lack of quality in the raw materials. Miyamoto also addressed concerns on growing difficulties in manufacturing value-added products like high-tensile steel using a lower quality metal.

Addressing optimism over a stabilized Iron ore spot price, Miyamoto said, “Iron ore spot prices have soared since the dam collapse, but futures prices are at lower levels, suggesting that market participants expect the market to stabilize,” since the Iron price had spiked to a two-year high on Monday, February the 4th.