Japan's three biggest steelmakers cut their annual profit forecasts this month. The reason is that the reduction of overseas automobile demand and the slowdown of the domestic manufacturing industry lead to a decrease in steel price and the decrease in steel profit margin. As a result, the three major steel enterprises cut production.
Nippon Steel, Japan's largest steelmaker, cut its profit forecast for the fiscal year ending March 31, 2020, to Y100bn ($917m), a 33% drop. The company previously announced a 54% drop in profits between April and September. In the context of the Asian market downturn, the profit margin of steel has shrunk, and the rise in the purchasing cost of Japanese manufacturing customers and the slowdown in exports has also reduced the profit margin, said Miyamoto Shenghong, executive vice president of Nippon Steel
On Tuesday, JFE, Japan's second-largest steelmaker, cut its annual profit forecast by 57% to Y60 billion (about $550 million). The reason is that profits in its steel sector have fallen to a new low, the lowest level since the company was founded in 2002
Kobe Steel, Japan's third-largest steelmaker, cut its annual profit forecast to a net loss of 5 billion yen ($45.85 million), after it forecast a profit of 10 billion yen ($91.7 million). The main reason for the decline is the weak domestic demand for cars and machinery
Weak demand forced the three companies to cut their annual crude steel production target by 1% - 5%. Japan's crude steel production fell to a 10-year low in the July September quarter as demand slowed and typhoons and fires shut down many factories
To improve efficiency, Nippon Steel announced a restructuring plan to merge its 16 domestic bases into six steel mills, which will be directly managed by its president from April next year.