Saturday , May 8 2021

Nippon Steel prepares for weaker prices with concerns about China's decline



Japanese steelmakers Nippon Steel & Sumitomo Metal are preparing for a weaker steel market in Asia as the increasing Sino-US trade war can reduce demand for steel in China's and Southeast Asia's biggest buyers, a senior group.

"The biggest uncertainty is how demand for steel and markets in China and Southeast Asia will change," Katsuhiro Miyamoto, executive vice president of Nippon Steel, told Reuters last week.

"We expect steel prices in Asia to weaken in the second half (October to March) from the first half (April to September), although the Japanese market is likely to remain strong with strong demand," he said, referring to this year. starting in April.

The world's third-largest steelmaker, with crude steel production, posted a 43 percent increase in net profit for the six months ended September, with its profit margin rising 3,200 yen ($ 28.44) per ton at the highest price of the product.

Companies, however, expect an increase in margins to fall to 2,000 yen for this year as steel prices across Asia are expected to fall in six months between October and March over the previous six-month period, Miyamoto said.

"US-China trade friction has a limited impact on the world steel market due to healthy demand in China and other regions, but if the Chinese economy weakens and China pushes steel exports to Southeast Asia, it will definitely have an impact, he said.

Steelmakers plan to produce 11 million tons of crude steel each quarter in the next fiscal year and maintain an annual production target of 45 million tons in the year to March 2021, Miyamoto said.

Reuters
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