Japan-based Nippon Steel Corporation has stated that the company’s annual profit may exceed its upgraded forecast, which rose sharply earlier this month as strong demand increased global steel prices except in Japan, according to Reuters.
Takahiro Mori, executive vice president of Nippon Steel, stated that the company’s overseas businesses have been outperforming the company’s expectations in July and August, with support from falling iron ore prices.
Iron ore prices increased above $230/mt in May and fell to $140/mt in August amid a recovery in output in Brazil and measures on reducing carbon emissions in China. “The prices may recover slightly, but not anywhere above $200/mt,” Takahiro Mori, said.
Meanwhile, Japanese automakers’ slower production continues to create a risk for the outlook for steelmakers, though its impact on Nippon Steel’s financial results will be limited as automakers stated that they will compensate for production cuts later this year, as SteelOrbis understands. In addition, Japanese steelmakers could not agree with local customers on product price increases amid rising material costs, while Nippon Steel stated that it may no longer guarantee stable supply if terms are not agreed.