Post by : Rohit Dhiman

Tokyo: Japan’s largest steel producer, Nippon Steel, has increased its financial outlook for fiscal year 2026, supported by stronger earnings from its United States Steel (US Steel) operations and improving conditions in the American steel market. The company announced that it has raised its full-year net profit forecast by 32% to 290 billion yen ($1.84 billion), reflecting better-than-expected performance from its US business following the acquisition of US Steel.

US Steel Becomes Key Driver of Group Earnings

Nippon Steel reported a net profit of 75.30 billion yen for the April-June quarter, marking a significant recovery compared with the 195.83 billion yen net loss recorded during the same period last year. The previous year’s loss was mainly linked to a major one-time financial impact related to the sale of its stake in the AM/NS Calvert joint venture. Nippon Steel Chief Financial Officer Takahiko Iwai said that US Steel played a major role in improving the company’s overall earnings. He added that operational improvements and quality enhancement measures implemented after the acquisition helped increase profitability at the US unit.

US Steel Profit Forecast Raised Sharply

The company has also upgraded its underlying business profit forecast for US Steel for the financial year ending March 2027. The forecast has been increased to 180 billion yen or more, compared with the previous estimate of 100 billion yen or more announced in May. Nippon Steel also revised its outlook for the US hot-rolled coil market, increasing its expected price range by $100 to between $1,000 and $1,100 per short ton, following recent price increases.

Read Also: Tensions Escalate Over US-Iran Discussions and Hormuz Shipping Risks

Weak Yen and Rising Costs Support Profit Outlook

According to the company, higher inventory valuation gains caused by a weaker Japanese yen against the US dollar and increasing raw material prices also contributed to the improved profit forecast. However, Nippon Steel continues to face challenges from global uncertainties, including geopolitical tensions. The ongoing Middle East conflict affected first-quarter earnings by around 25 billion yen, with the company expecting a total negative impact of approximately 60 billion yen for the full financial year.

Company Focuses on Domestic Steel Market Recovery

While profits from Nippon Steel’s domestic operations remain under pressure, the company plans to pass higher raw material and fuel expenses on to customers. CFO Iwai said recent anti-dumping measures introduced by the Japanese government could help reduce the impact of low-priced steel imports and potentially support stronger domestic steel prices.

#world news #Global News #Business News #Asia News