Japan's largest steelmaker Nippon Steel & Sumitomo Metal Corp (NSSMC) warned on Wednesday that its 1-year IFRS profit will be 6 percent lower than previously forecast, citing a significant decline in steel production this fiscal year. p>
The company is currently forecasting an annual profit of 330 billion yen (roughly US $ 3 billion), below its previous forecast of 350 billion yen.
NSSMC, the third largest steelmaker in world, also reduced the estimate of steel production to 41.3 million tons due to technical problems at the mills.
NSSMC Executive Vice President Katsuhiro Steel said that the main problem was the drop in the quality of rolled products, citing difficulties in production of value-added goods.
When asked if the revision was also related to higher prices for iron ore following the dam break by Brazilian mining company Vale in B razil, Miyamoto said the incident was not included in the calculations, but that higher raw material prices could affect profits in the next fiscal year beginning April 1st.
“Iron ore spot prices have risen after the collapse of the dam, but future prices are at a lower level, which suggests that market participants expect stabilization, ”Miyamoto said.
Iron ore prices reached a two-year high on Monday.
Nippon Steel's annual earnings forecast dwindles following similar reviews from competitors such as JFE Steel, JFE Holdings and Kobe Steel.
