Japanese electric arc furnace-based steelmaker Tokyo Steel Manufacturing has announced that it recorded a non-consolidated operating loss of JPY2.31 billion in the first quarter ended June 30 of the fiscal year 2026-27, compared to an operating profit of JPY4.77 billion in the same period of the previous fiscal year.
The company’s net sales decreased by 1.3 percent year on year to JPY 72.93 billion ($448.90 million), while its net profit fell by 49.5 percent to JPY 1.88 billion ($11.57 million). Tokyo Steel stated that gains from the sale of investment securities and other assets supported its net result.
According to the company, the sharp rise in scrap prices amid escalating tensions in the Middle East significantly weighed on its profitability. Although Tokyo Steel implemented three product price increases starting from the end of the previous fiscal year, the increases have yet to be fully reflected in actual shipment prices.
In the given quarter, Tokyo Steel’s crude steel output declined by 1.5 percent year on year to 838,000 mt, while its rolled steel production decreased by 0.9 percent to 767,000 mt. Its steel product shipments totaled 739,000 mt, down 0.9 percent year on year, including 629,000 mt supplied to the domestic market and 109,000 mt exported.
The company’s average steel product sales price increased by JPY 600/mt ($3.69/mt) year on year to JPY 96,800/mt ($595.84/mt), whereas its average scrap procurement price surged by JPY 11,900/mt ($73.25/mt) to JPY 55,200/mt ($339.78/mt). Consequently, its metal spread narrowed by JPY 11,300/mt ($69.55/mt) to JPY 41,600/mt ($256.06/mt).
For the full fiscal year ending March 31, 2027, Tokyo Steel has maintained its sales forecast at JPY 315 billion ($1.94 billion), up 17.5 percent year on year, and its operating loss forecast at JPY 4 billion ($24.62 million). Meanwhile, it has revised its net profit forecast upward from zero to JPY 1 billion ($6.16 million), though the revised figure would still represent a 91.3 percent year-on-year decrease.
Tokyo Steel expects profitability to improve gradually toward the second half of the fiscal year as its price increases are reflected in shipment prices. The company will also focus on improving production yields, aligning output with demand and expanding sales of low-carbon steel products.
