The world's second biggest steelmaker Japan-based Nippon Steel & Sumitomo Metal Corp. (NSSMC) has announced its financial results for the first quarter ended June 30 of the financial year 2014-15, posting a net profit of JPY 48.3 billion ($469.6 million), down from a net profit of JPY 63.4 billion in the corresponding quarter of the previous financial year. In the first financial quarter, the company's net sales amounted to JPY 1.36 trillion ($13.2 billion), up 5.8 percent year on year.
According to NSSMC, steel demand in Japan was generally robust when seasonal factors and an extraordinary factor were excluded. While steel demand from the civil engineering and construction fields decreased partly due to seasonal factors, there were signs of improvement in demand from manufacturing industries on the back of a recovery in capital expenditure and business confidence, despite a certain downturn caused by a reaction to the consumption tax hike.
During the June quarter, NSSMC's steelmaking and steel fabrication segment recorded net sales of JPY 1.21 trillion ($11.7 billion), increasing by 6.6 percent year on year. Exports steadily recovered, mainly due to a mild recovery in the global economy but global markets remained severe as Chinese steelmakers continued production at high volumes.
Meanwhile, in the given period, NSSMC produced 11.86 million mt of crude steel, down 2.2 percent, while the company's steel product shipments amounted to 10.43 million mt, increasing by 1.36 percent, both year on year.
NSSMC said that, with regard to the domestic steel market, the company projects an effective increase in demand, anticipating full-fledged progress in reconstruction demand, a pick-up in capital expenditure, and an upturn in business confidence. In export markets, demand appears to remain firm thanks to steady global economic growth. However, steel supply continues to be a concern, with Chinese steelmakers continuing to produce at high volumes.