€ric schreef op 2 februari 2014 09:51:
DJ Nippon Steel & Sumitomo Metal Profit Soars as Abenomics Sparks Demand
By Hiroyuki Kachi
TOKYO--The world´s second-biggest steelmaker said Thursday its net profit for the fiscal third quarter that ended in December more than tripled, as the economic policies of Prime Minister Shinzo Abe stoked demand among big customers like auto makers, construction and civil engineering firms.
Nippon Steel & Sumitomo Metal Corp. said its net profit shot up to Yen77.2 billion ($754 million) in the October-December period, from a profit of Yen24.7 billion in the same period a year earlier.
Sales by the world´s second-biggest steelmaker by output after ArcelorMittal were up 18% to Yen1.363 trillion from Yen1.154 trillion in the same quarter a year earlier.
"The time is coming to confirm a full-scale pickup in steel consumption" due to the effects of Abenomics, said Katsuhiko Ota, Nippon Steel´s executive vice president at a news conference, adding that the company´s steel mills are running almost at full capacity.
The Japan Iron and Steel Federation reported that the nation´s crude steel output in the October-December quarter rose 8.6% on year to 28.14 million tons. That resulted in a rise in crude steel output in the 2013 calendar year of 3.1% to 118.74 million tons, the first increase in three years, bringing output back to the 2008 level.
While the uptick in demand helped push up prices, the weaker yen under Abenomics made Japan´s steel exports more competitive overseas.
Mr. Ota said that while he expects prices of steel products to remain firm in Japan, he doesn´t expect big gains in prices overseas because of persistent oversupply in Asian markets caused by attempts by Chinese steel mills to ramp up production. But he said that with these mills already at their break-even points, further declines are unlikely.
Nippon Steel & Sumitomo Metal´s upbeat earnings are a contrast with those of South Korea´s largest steelmaker, Posco, which Tuesday announced a 60% tumble in fourth-quarter net profit to 203 billion won ($187 million) on a parent basis, as world-wide demand was weak and the won´s strength hit prices.
For the full fiscal year ending March, Nippon Steel & Sumitomo Metal raised its net profit outlook to Yen220 billion from Yen200 billion due to proceeds from sales of securities holdings. It left unrevised its sales outlook at Yen5.450 trillion.
Nippon Steel & Sumitomo Metal was created through the merger of the nation´s biggest and third-biggest steelmakers in October 2012. It reports earnings under Japanese accounting standards.
Write to Hiroyuki Kachi at
hiroyuki.kachi@wsj.com