Apr 4, 2011 8:24am GMT
April 4 (Reuters) - Nippon Steel Corporation (5401.T: Quote)
* Moody's reviews Nippon Steel Corp. ratings for possible downgrade
(sourced Reuters)
Showing posts with label Nippon Steel Corp. Show all posts
Showing posts with label Nippon Steel Corp. Show all posts
Tuesday, April 5, 2011
Thursday, March 10, 2011
Nippon Steel ups H-beam price by 6 pct -source
Thu Mar 10, 2011 9:10am GMT
Price rising by 5,000 yen per tonne - source
* March marks fourth-consecutive monthly price rise
* Nippon aims for total Y20,000 rise by April - source (Adds details, Feb-end stock level)
TOKYO, March 10 (Reuters) - Nippon Steel Corp has raised its March price for H-beam steel used in construction by around 6 percent from February, a source said, even though sluggish sales pushed inventories higher during the month.
Nippon Steel, the world's No.4 steelmaker and a major producer of H-beams in Japan, has told distributors it is raising prices by around 5,000 yen($60)per tonne, a source with direct knowledge of the matter said.
The company, which has already raised the price of H-beams by roughly 15,000 yen in the past three months, aims to up that to a total of 20,000 yen by the end of March to pass on soaring input costs, the source said.
Nippon Steel said on Thursday domestic demand for construction steel remained weak, but that there were signs of a pick up in office building and small infrastructure projects.
The company's domestic inventories of H-beam steel rose 8.9 percent to 174,600 tonnes at the end of February from the month before, it said.
"Shipments were slow in February due in part to the market's seasonal weakness, but with demand from small office and other building projects increasing, we plan to implement another price hike as soon as possible," said a company official, who asked not to be identified as he was not authorised to talk about the issue publicly.
Rival Tokyo Steel Manufacturing Co said last month it would raise prices of all its products in March to cover rising input costs. ($1 = 82.755 Japanese Yen) (Reporting by Yuko Inoue; Editing by Joseph Radford,sourced:Thomson Reuters)
* March marks fourth-consecutive monthly price rise
* Nippon aims for total Y20,000 rise by April - source (Adds details, Feb-end stock level)
TOKYO, March 10 (Reuters) - Nippon Steel Corp has raised its March price for H-beam steel used in construction by around 6 percent from February, a source said, even though sluggish sales pushed inventories higher during the month.
Nippon Steel, the world's No.4 steelmaker and a major producer of H-beams in Japan, has told distributors it is raising prices by around 5,000 yen($60)per tonne, a source with direct knowledge of the matter said.
The company, which has already raised the price of H-beams by roughly 15,000 yen in the past three months, aims to up that to a total of 20,000 yen by the end of March to pass on soaring input costs, the source said.
Nippon Steel said on Thursday domestic demand for construction steel remained weak, but that there were signs of a pick up in office building and small infrastructure projects.
The company's domestic inventories of H-beam steel rose 8.9 percent to 174,600 tonnes at the end of February from the month before, it said.
"Shipments were slow in February due in part to the market's seasonal weakness, but with demand from small office and other building projects increasing, we plan to implement another price hike as soon as possible," said a company official, who asked not to be identified as he was not authorised to talk about the issue publicly.
Rival Tokyo Steel Manufacturing Co said last month it would raise prices of all its products in March to cover rising input costs. ($1 = 82.755 Japanese Yen) (Reporting by Yuko Inoue; Editing by Joseph Radford,sourced:Thomson Reuters)
Friday, March 4, 2011
Nippon Steel extends interest in Integra Coal Joint Venture in Australia
Friday, 04 March 2011
Japan's largest steelmaker Nippon Steel Corporation has announced that it has concluded a sales agreement with Toyota Tsusho concerning the purchase of 2.35 percent interests owned by Toyota Tsusho via its Australian subsidiary in the Integra Coal Joint Venture in the province of New South Wales, Australia.
Nippon Steel, already holding an interest of 3.6 percent in this JV, with this additional purchase will own an interest of 5.95 percent.
"This additional purchase of interests in this JV will add strength to Nippon Steel's capabilities and endeavors to ensure stable procurement of semi-soft coking coal for the future," reads Nippon Steel's statement.
Integra Coal Joint Venture, heretofore operated by the respective Australian subsidiaries of Vale, a global resources company, POSCO, a Korean steel company, JFE/JFE Shoji Trade, Toyota Tsusho, and Nippon Steel, produces about 3.3 million mt a year of semi-soft coking coal and steaming coal.(sourced:Thomson Reuters)
Nippon Steel, already holding an interest of 3.6 percent in this JV, with this additional purchase will own an interest of 5.95 percent.
"This additional purchase of interests in this JV will add strength to Nippon Steel's capabilities and endeavors to ensure stable procurement of semi-soft coking coal for the future," reads Nippon Steel's statement.
Integra Coal Joint Venture, heretofore operated by the respective Australian subsidiaries of Vale, a global resources company, POSCO, a Korean steel company, JFE/JFE Shoji Trade, Toyota Tsusho, and Nippon Steel, produces about 3.3 million mt a year of semi-soft coking coal and steaming coal.(sourced:Thomson Reuters)
Thursday, March 3, 2011
Nippon and JFE Steel raising stakes in Australian coking coal mine
Thursday, 03 Mar 2011, The Nikkei
Nikkei reported that Nippon Steel Corpand JFE Steel Corp said that they will purchase additional rights to an Australian coking coal project from Toyota Tsusho Corp.
By May, Toyota Tsusho will unload 13% of its rights, selling 2.35% each to Nippon Steel, the JFE Holdings Inc unit and POSCO. Their interests will swell to 5.95%.
The remaining 5.95% will be bought by Chubu Electric Power Co since the mine also produces regular coal for use in power generation.
The Integra Coal Joint Venture, located in the state of New South Wales, produces 3.3 million tonnes of coking and other coal annually and is expected to continue supplying the materials for another 20 years.
Brazilian resource major Vale SA holds a 61.2% interest, followed by Toyota Tsusho with 28%. Nippon Steel, JFE Steel and South Korea's POSCO each own 3.6%.
By May, Toyota Tsusho will unload 13% of its rights, selling 2.35% each to Nippon Steel, the JFE Holdings Inc unit and POSCO. Their interests will swell to 5.95%.
The remaining 5.95% will be bought by Chubu Electric Power Co since the mine also produces regular coal for use in power generation.
The Integra Coal Joint Venture, located in the state of New South Wales, produces 3.3 million tonnes of coking and other coal annually and is expected to continue supplying the materials for another 20 years.
Brazilian resource major Vale SA holds a 61.2% interest, followed by Toyota Tsusho with 28%. Nippon Steel, JFE Steel and South Korea's POSCO each own 3.6%.
Tags :New South Wales, Japanease market, raw material, Posco steel, Vale SA,
Nippon, POSCO, others in $1.8 bln Brazil rare-metal deal
Thu Mar 3, 2011 4:24am GMT
* Japanese group to take 10 pct of Brazil's CBMM - NPS
* POSCO, NPS to buy 5 pct, invest about $312 mln each - NPS
* Deal values unlisted CBMM at around $12 bln
* Asian countries in race to secure metals used in auto steel
By Hyunjoo Jin and Ju-min Park
SEOUL, March 3 (Reuters) - Nippon Steel Corp , JFE , POSCO and others will buy a 15 percent stake in a Brazilian rare metal miner for around $1.8 billion, South Korea's National Pension Service (NPS) said on Thursday.
The deal adds to a growing cross-border tie-ups by Japan and South Korea to secure natural resources to power their manufacturing-based economies.
The Brazilian company is Companhia Brasileira de Metalurgia e Mineracao (CBMM), which mines and processes niobium, a rare metal used to produce high-grade steel used in autos, aerospace and pipeline to make steel products lighter and stronger.
Brazil is the world's No. 1 Niobium producer. The Brazilian mining industry association (IBRAM) data said Brazil produced 80,000 tonnes out of world production of 83,000 tonnes produced globally in 2010 and the ratio has been similar in the last decade.
CHINA VS JAPAN, KOREA
"Behind the move is a growing demand for niobium in China, and its aggressive move to secure supplies from abroad because its domestic output is very limited," said Kaz Machida, president of KAY International, a rare metal consultant.
"Japanese steelmakers, worried of China's aggressive moves, moved quickly in a tie-up with Korean firms," he said.
China's domestic niobium production is limited, although demand is expected to soar in the future. In contrast, China has rich rare earth supplies, producing 97 percent of the minerals.
An NPS spokesman said Japanese investors including Nippon Steel, JFE Holdings and trading firm Sojitz Corp will buy a 10 percent stake in CBMM.
South Korea's POSCO and National Pension Service will jointly buy 5 percent of the unlisted company, investing around 350 billion won ($312 million) each, the NPS spokesman said.
"Resources assets tend to generate higher returns and the joint investment with industry specialists such as steelmakers will generate more synergies," the spokesman said.
The deal values the unlisted CBMM at around $12 billion.
Another Japanese-Korean consortium is bidding to develop the world's largest untapped coking coal deposit in Mongolia, while Japanese trading firm Itochu Corp and six Asian steelmakers paid about $3 billion for a 40 percent stake in Brazilian iron ore miner Namisa in 2008. (Additional reporting by Yuko Inoue in Tokyo and Peter D. Murphy in Brasilia; Editing by Jonathan Hopfner and Lincoln Feast,sourced:Thomson Reuters)
Tags :(CBMM), high grade steel metal, aerospace, pipeline, steel products, IBRAM, Mongolia, raw material, steel mills
* POSCO, NPS to buy 5 pct, invest about $312 mln each - NPS
* Deal values unlisted CBMM at around $12 bln
* Asian countries in race to secure metals used in auto steel
By Hyunjoo Jin and Ju-min Park
SEOUL, March 3 (Reuters) - Nippon Steel Corp , JFE , POSCO and others will buy a 15 percent stake in a Brazilian rare metal miner for around $1.8 billion, South Korea's National Pension Service (NPS) said on Thursday.
The deal adds to a growing cross-border tie-ups by Japan and South Korea to secure natural resources to power their manufacturing-based economies.
The Brazilian company is Companhia Brasileira de Metalurgia e Mineracao (CBMM), which mines and processes niobium, a rare metal used to produce high-grade steel used in autos, aerospace and pipeline to make steel products lighter and stronger.
Brazil is the world's No. 1 Niobium producer. The Brazilian mining industry association (IBRAM) data said Brazil produced 80,000 tonnes out of world production of 83,000 tonnes produced globally in 2010 and the ratio has been similar in the last decade.
CHINA VS JAPAN, KOREA
"Behind the move is a growing demand for niobium in China, and its aggressive move to secure supplies from abroad because its domestic output is very limited," said Kaz Machida, president of KAY International, a rare metal consultant.
"Japanese steelmakers, worried of China's aggressive moves, moved quickly in a tie-up with Korean firms," he said.
China's domestic niobium production is limited, although demand is expected to soar in the future. In contrast, China has rich rare earth supplies, producing 97 percent of the minerals.
An NPS spokesman said Japanese investors including Nippon Steel, JFE Holdings and trading firm Sojitz Corp will buy a 10 percent stake in CBMM.
South Korea's POSCO and National Pension Service will jointly buy 5 percent of the unlisted company, investing around 350 billion won ($312 million) each, the NPS spokesman said.
"Resources assets tend to generate higher returns and the joint investment with industry specialists such as steelmakers will generate more synergies," the spokesman said.
The deal values the unlisted CBMM at around $12 billion.
Another Japanese-Korean consortium is bidding to develop the world's largest untapped coking coal deposit in Mongolia, while Japanese trading firm Itochu Corp and six Asian steelmakers paid about $3 billion for a 40 percent stake in Brazilian iron ore miner Namisa in 2008. (Additional reporting by Yuko Inoue in Tokyo and Peter D. Murphy in Brasilia; Editing by Jonathan Hopfner and Lincoln Feast,sourced:Thomson Reuters)
Tags :(CBMM), high grade steel metal, aerospace, pipeline, steel products, IBRAM, Mongolia, raw material, steel mills
Monday, February 28, 2011
Nippon says Y20,000 price hike needed after April
(Update1- Nippon Steel sees input costs up by Y15,000/tonne)
* Nippon says Y20,000 price hike needed after April
* Says price increase necessary due to higher input costs
TOKYO Feb 28 (Reuters) - Nippon Steel Corp expects major input costs to rise by more than 15,000 yen ($183.50) per tonne after April, a company official said on Monday.
Due to the rise in input costs, Nippon Steel estimates that a price hike of about 20,000 yen per tonne is necessary for its steel products in general, Kozo Uchida, a senior Nippon Steel executive, told reporters.
That may be equivalent to a nearly 25 percent price hike, given Nippon Steel's average product price of about 82,000 yen planned for the year to March 31.
Its smaller rival JFE Steel last week told primary distributors that it would raise prices steel sheets by 20,000 yen per tonne, signalling to volume contract users such as Toyota Motor Corp the level of price hike it seeks.
Big steelmakers usually push through a price hike among its primary dealers first before starting tough pricing talks with volume users, who buy on contracts, like car and electronics makers and shipbuilders. (Reporting by Yuko Inoue; Editing by Chris Gallagher,sourced:Thomson Reuters)
Nippon Steel sees input costs up by Y15,000/tonne
Mon Feb 28, 2011 5:48am GMT
TOKYO Feb 28 (Reuters) - Nippon Steel (5401.T: Quote) expects major input costs to rise by more than 15,000 yen ($183.50) per tonne in April-June from the previous quarter, a company official said on Monday.
Due to the rise in input costs, Nippon Steel estimates that a price hike of about 20,000 yen per tonne is necessary for its steel products in general, Kozo Uchida, a senior Nippon Steel executive, told reporters. (Reporting by Yuko Inoue, sourced: Thomson Reuters)
Tags:steelmaking, Kozo Uchida, Japan, steel industry
Due to the rise in input costs, Nippon Steel estimates that a price hike of about 20,000 yen per tonne is necessary for its steel products in general, Kozo Uchida, a senior Nippon Steel executive, told reporters. (Reporting by Yuko Inoue, sourced: Thomson Reuters)
Tags:steelmaking, Kozo Uchida, Japan, steel industry
Nippon Steel, S'tomo Metal pick merger advisers -sources
Mon Feb 28, 2011 4:59am GMT
TOKYO Feb 28 (Reuters) - Nippon Steel Corp (5401.T: Quote) has picked Mizuho Securities (8606.T: Quote), Mitsubishi UFJ Morgan Stanley, JP Morgan (JPM.N: Quote) and Bank of America Corp's (BAC.N: Quote) Merrill Lynch to advise it on its planned merger with Sumitomo Metal Industries (5405.T: Quote), sources told Reuters.
Sumitomo has hired Nikko Cordial Securities, a unit of Sumitomo Mitsui Financial Group (8316.T: Quote), Daiwa Securities Group (8601.T: Quote), Goldman Sachs Inc (GS.N: Quote) and Deutsche Securities (DBKGn.DE: Quote) to advise it on the planned union, five sources familiar with the matter said. (Reporting by Emi Emoto; Writing by Tim Kelly,sourced:Thomson Reuters)
Sumitomo has hired Nikko Cordial Securities, a unit of Sumitomo Mitsui Financial Group (8316.T: Quote), Daiwa Securities Group (8601.T: Quote), Goldman Sachs Inc (GS.N: Quote) and Deutsche Securities (DBKGn.DE: Quote) to advise it on the planned union, five sources familiar with the matter said. (Reporting by Emi Emoto; Writing by Tim Kelly,sourced:Thomson Reuters)
Tags: Daiwa Securities group, advice for planned mergers, Nikko Cordial Securities, Sumitomo Mitsui Financial Group, Daiwa Securities Group, Goldman Sachs Inc, Deutsche Securities
Thursday, February 24, 2011
JFE to up steel sheet price by Y20,000 from April
Thu Feb 24, 2011 5:56am GMT
TOKYO Feb 24 (Reuters) - Japan's JFE Steel Corp (5411.T: Quote) said on Thursday it will raise prices of steel sheet for sale through distributors by 20,000 yen ($242) per tonne from April, signalling to high-volume contract users such as Toyota Motor Corp (7203.T: Quote) the level of price hike it seeks.
Input costs for steelmaking are expected to rise sharply in the April-June quarter as demand in Asia remains strong and unresolved logistical bottlenecks due to disruptions in Australia boost coal prices, though steel product prices have yet to fully reflect higher costs.
But prospects of price talks between steelmakers such as JFE and Nippon Steel Corp (5401.T: Quote) and high-volume users who buy via contracts, including Toyota, have becoming uncertain, given BHP Billiton's (BHP.AX: Quote) BLT.l demand to shift coal pricing to a monthly basis instead of quarterly as it is now.
JFE Steel President Eiji Hayashida called BHP's proposal unacceptable on Wednesday, saying it would make costs hard to predict and complicate steel users' production plans. [ID:nTOE71M03V]
Japanese steelmakers and carmakers usually set contract prices for steel sheet for the six months to September after costs of iron ore and coal are set.
The cost of iron ore in April-June is expected to jump as much as 25 percent from the preceding quarter to a record high.
JFE, the world's No.5 steelmaker, does not disclose contract prices with large-lot users, but has said it expects its steel product prices including exports to average 79,000 yen per tonne for the current year to March 31. ($1=82.54 Yen) (Reporting by Yuko Inoue; Editing by Michael Watson, sourced: Thomson Reuters)
Input costs for steelmaking are expected to rise sharply in the April-June quarter as demand in Asia remains strong and unresolved logistical bottlenecks due to disruptions in Australia boost coal prices, though steel product prices have yet to fully reflect higher costs.
But prospects of price talks between steelmakers such as JFE and Nippon Steel Corp (5401.T: Quote) and high-volume users who buy via contracts, including Toyota, have becoming uncertain, given BHP Billiton's (BHP.AX: Quote) BLT.l demand to shift coal pricing to a monthly basis instead of quarterly as it is now.
JFE Steel President Eiji Hayashida called BHP's proposal unacceptable on Wednesday, saying it would make costs hard to predict and complicate steel users' production plans. [ID:nTOE71M03V]
Japanese steelmakers and carmakers usually set contract prices for steel sheet for the six months to September after costs of iron ore and coal are set.
The cost of iron ore in April-June is expected to jump as much as 25 percent from the preceding quarter to a record high.
JFE, the world's No.5 steelmaker, does not disclose contract prices with large-lot users, but has said it expects its steel product prices including exports to average 79,000 yen per tonne for the current year to March 31. ($1=82.54 Yen) (Reporting by Yuko Inoue; Editing by Michael Watson, sourced: Thomson Reuters)
Tuesday, February 22, 2011
WorldAutoSteel, the automotive group of the World Steel Association, is comprised of seventeen major global steel producers from around the world
About WorldAutoSteel:
WorldAutoSteel, the automotive group of the World Steel Association, is comprised of seventeen major global steel producers from around the world.
Our mission is to advance and communicate steel’s unique ability to meet the automotive industry’s needs and challenges in a sustainable and environmentally responsible way. We are committed to a low carbon future, the principles of which are embedded in our continuous research, manufacturing processes, and ultimately, in the advancement of automotive steel products, for the benefit of society and future generations.
MembersOur mission is to advance and communicate steel’s unique ability to meet the automotive industry’s needs and challenges in a sustainable and environmentally responsible way. We are committed to a low carbon future, the principles of which are embedded in our continuous research, manufacturing processes, and ultimately, in the advancement of automotive steel products, for the benefit of society and future generations.
Anshan Iron and Steel Group Corporation - China
Arcelor Mittal - Luxembourg
Baoshan Iron & Steel Co. Ltd. - China
China Steel Corporation - Taiwan, China
Hyundai-Steel Company - South Korea
JFE Steel Corporation - Japan
Kobe Steel, Ltd. - Japan
Nippon Steel Corporation - Japan
Nucor Corporation - USA
POSCO - South Korea
SeverStal - Russia/USA
Sumitomo Metal Industries, Ltd. - Japan
Tata Steel - India, UK, Netherlands
ThyssenKrupp Steel Europe AG - Germany
USIMINAS - Brazil
United States Steel Corporation - USA
voestalpine Stahl GmbH - Austria
To learn more about WorldAutoSteel and its projects, visit www.worldautosteel.org
Tags:Usiminas, United States Steel Corp, ThyssenKrupp Steel Europe, Severstal, Kobe steel, China Steel Corp, Baoshan Iron and Steel Co., Anshan Iron and Steel Group
Tuesday, February 15, 2011
Tata Steel margins under pressure, in talks with Rio
Tue Feb 15, 2011 3:44pm GMT
* Q3 profit 10.03 bln rupees vs estimate of 11.1 bln rupees
* Sees 2011 Europe steel demand up 3-5 pct, India's 10-12 pct
* Interested in coal supplies from Riversdale,talking to Rio
By Prashant Mehra
MUMBAI, Feb 15 (Reuters) - Tata Steel (TISC.BO: Quote) said its margins would remain under pressure due to rising raw material prices, adding that it was in talks with Rio Tinto (RIO.AX: Quote) to ensure coal supplies from Africa-focused miner Riversdale (RIV.AX: Quote).
The world's No. 7 steelmaker on Tuesday said quarterly net profit more than doubled, driven by demand and pricing in Europe and robust growth at its Indian operations, but the company lagged estimates as higher raw material costs squeezed margins.
The $500 billion global steel sector has been caught in a margin squeeze since the middle of 2010, when raw material costs began increasing and steel prices dropped as activity slowed. While demand is improving from the auto sector, the other key market, construction, is struggling to pull clear of the crisis.
Tata Steel said it expected steel demand in Europe to rise 3 to 5 percent this year and demand in India to grow 10 to 12 percent, but managing raw material costs would be a key challenge.
"Margins are under pressure because we are consuming raw materials at inflated prices," Karl Kohler, head of Tata Steel's European operations, told reporters after the results announcement.
"Selling prices are recovering but the position needs to be maintained as impact of raw material costs is increasing."
Managing Director Hemant Nerurkar said Tata Steel was interested in securing coal supplies from Riversdale, in which it owns a 24 percent stake. Riversdale has received a $3.9 billion bid from Rio Tinto, which was backed by Tata Steel's representative on Riversdale's board.
"We are basically interested in securing coal supplies. We are discussing various options with Rio," Nerurkar said.
Tata Steel acquired Corus, Europe's second-largest steelmaker, for $13 billion in 2007, marking the largest overseas acquisition made by an Indian company so far.
European operations account for two-thirds of Tata Steel's global capacity of about 30 million tonnes, while the Indian operations contribute a quarter. It also has units in Thailand and Singapore.
Most global steelmakers have suffered sharp falls in December quarter profit. Last week, the world's largest steelmaker ArcelorMittal (ISPA.AS: Quote) reported profit lower than the previous quarter, but forecast a rebound in demand and prices at the start of 2011. POSCO (005490.KS: Quote), Nippon Steel (5401.T: Quote) and JFE (5411.T: Quote), some of the largest steelmakers, all suffered sharp falls in October-December earnings due to pricey raw materials and tepid demand.
Q3 PROFIT MORE THAN DOUBLES
Tata Steel reported a net profit after minority interest and share of profit of associates of 10.03 billion rupees ($220 million) for its fiscal third quarter ended December, compared with a consolidated net profit of 4.73 billion rupees a year ago.
Net sales were 286.06 billion rupees compared with 260.69 billion a year earlier.
A Reuters poll of brokerages had forecast a net profit of 11.1 billion rupees for the quarter, on net sales of 263.2 billion.
Last month, Tata Steel raised $770 million in a share sale in India to fund a 3-million-tonne capacity expansion at a plant in eastern India and repay a part of its $10 billion debt. [ID:nSGE70K06A]
Tata Steel said it had started preparatory work for a 6 million-tonne a year steel plant in the eastern state of Orissa.
Shares in Tata Steel, valued by the market at about $12.3 billion, are down about 9 percent so far in 2011, compared with about 11 percent fall in India's benchmark stock index .BSESN.
Ahead of the results, Tata Steel shares closed 0.4 percent lower at 616.55 rupees in a Mumbai market that rose 0.4 percent. ($1=45.5 rupees) (sourced:ThomsonReuters)
Tags:Tata steel, margins under pressure, Rio Tinto, Riversdale Mining Ltd., Europe, Q3, raw material, steelmakers, Corus, Thailand, Singapore, ArcelorMittal, POSCO, Nippon Steel Corp, JFE
Chinese steelmakers lift March prices on high cost
Tue Feb 15, 2011 6:42am GMT* Main product prices up around 300 yuan/tonne
* Price increases in line with expectations
* Analysts show concerns of correction
(Combines price changes by Baosteel and Nippon, adds details, analysts' comments)
By Ruby Lian and Jason Subler
SHANGHAI, Feb 15 (Reuters) - Two top Chinese steelmakers will raise their main product prices for the third month in a row in March, a widely-expected move to cope with surging raw material costs and to reflect a positive outlook for demand.
Asian steelmakers have struggled with surging costs of coking coal and iron ore amid a supply squeeze over the past few months.
The devastating floods in Queensland in Australia have sent coking coal prices up by around one third while export restrictions from India have contributed to a jump of more than 10 percent in iron ore prices since the beginning of the year.
The country's top listed steelmaker, Baoshan Iron & Steel (Baosteel) , said on Tuesday it would follow Monday's move by its rival Wuhan Steel , China's No.3 producer, and lift March prices for key products.
Baosteel will raise prices for hot-rolled coil by 300 yuan ($45.48) per tonne, while prices for cold-rolled coil will go up by 260-300 yuan per tonne. Wuhan raised both by 300 yuan.
"The increases are within expectation as recovering orders from downstream sectors and higher raw materials costs have forced domestic steelmakers to raise prices," said Hu Yanping, an analyst with industry consultancy Custeel.com.
Despite the high cost of iron ore, China imported a record 69.0 million tonnes of the material in January, Chinese customs data showed on Monday. The monthly value of shipments rose for the third month in a row, skyrocketing to a record of $10.4 billion.
"We expect the problem with refractory material (cost-push and technical issues) to last for a while and prices for HRC/CRC could increase in short run," Citi Investment Research & Analysis said in a research note.
Baosteel's shares were 0.4 percent higher by 0548 GMT while the broader benchmark index gained 1.0 percent.
HEADWIND IN MARCH?
Spot iron ore prices rose to fresh record highs and were likely to extend their winning streak on Tuesday, prompting Asian steelmakers to increase product prices.
Outside of China, Japan's top steelmaker Nippon Steel Corp also raised February contract price for H-beam steel by 3-4 percent, joining the battle to pass on surging upstream raw materials costs to end users.
The most active October rebar futures on the Shanghai Futures Exchange touched a high of 5,196 yuan per tonne on Tuesday, near the record 5,230 yuan hit last Friday.
Despite sharp gains, some analysts believe the post-holiday rally in steel prices is likely to come to an end in March as traders and end users may not be able to accept aggressive price hikes as the intensifying monetary tightening measures continues to weigh on prices and demand.
Chinese inflation was lower than expected at 4.9 percent in the year to January, but price pressures continued to build and will force the central bank to stick to its course of monetary tightening.
"The most serious threat to the current steel price is the accelerating production pace of private steel mills," Henry Liu, head of Commodities/Metals & Mining of Hong Kong-based Mirae Asset, said in a research report.
"Steel mills are recklessly boosting their ex-factory prices, which further squeezes the margins of traders. The party will come to an end when traders find it difficult to finance their inventories," Liu added.
Citi also noted that marginal producers' cash profit for rebar continues shrinking as leading steel mills mainly produce high-end flat products. ($1=6.596 Yuan)
(Reporting by Ruby Lian,Jason Subler, Editing by Kazunori Takada, Himani Sarkar,sourced:reuters)
Tags:Chinese steelmakers, March 2011 contract prices, raw material, strong demand, coking coal, Baoshan Iron and Steel Co., Citi Investment, Nippon Steel Corp, Shanghai Futures Exchange, import export, steel mills
Nippon Steel raises H beam prices for February shipments
Tuesday, 15 Feb 2011
Reuters reported that Nippon Steel Corp has raised its February contract price for H beams by 3% to 4% or about JPY 3,000 per tonne.
It is the third consecutive month of price rises for H beams and follows a 11% to 12% hike in January. (sourced:Reuters)
Tags:Nippon Steel Corp, raised contract price, H beams
Reuters reported that Nippon Steel Corp has raised its February contract price for H beams by 3% to 4% or about JPY 3,000 per tonne.
It is the third consecutive month of price rises for H beams and follows a 11% to 12% hike in January. (sourced:Reuters)
Tags:Nippon Steel Corp, raised contract price, H beams
Monday, February 14, 2011
Steel deal sets example for Japan Inc say analysts
By David Watkins (AFP)
Monday,14 Feb'2011
TOKYO — The proposed merger of two Japanese steel giants is a sign of an industry looking to reassert itself and an example to Japan Inc. that restructuring is crucial to take on competition, say analysts.
Japan's biggest steelmaker Nippon Steel and third-ranked rival Sumitomo Metal Industries are working towards a merger that would create the world's second-largest steel firm by 2012, behind Luxembourg-based ArcelorMittal.
The agreement is the first steel industry merger in a decade in the country, and analysts say the move sets an example to the rest of Japan Inc. as it grapples with a weak home economy, a strong yen and rising overseas rivals.
"There is a desperate need for mergers and acquisitions to stitch together Japan's diffuse corporate base," said Nicholas Smith, director of equity research with MFGlobal in Tokyo.
The Nippon Steel-Sumitomo Metal move is seen as indicative of the growing need for steelmakers to gain leverage as prices for coal, iron ore and other raw materials of steel touch record levels.
"Increased scale will make them stronger in negotiating with raw material suppliers -- the rapid run-up in material prices had really hammered profitability," said Smith.
"The merger will give Nippon Steel the scale to consider acquisitions of raw material suppliers, like the Chinese steelmakers have done," he said, noting Chinese crude steel production has more than quadrupled in the last 10 years.
The deal also serves as an example to the rest of corporate Japan.
Many see consolidation in Japan's corporate space as essential to taking on overseas competition, with too many companies making the same products compared with the likes of South Korea and industrial champions such as Samsung.
"Often in comparison with South Korea, Japan is said to have too many players in such markets as autos and electrical machinery," added Hideyuki Araki, economist at Resona Research Institute.
"They vie for the same pie and can be worn out in domestic competition. There is no doubt that a single company that has a strong grip on the industry can better compete in international markets," he said.
Sony partly blamed a fall in third quarter profit on falling TV prices amid heavy competition in a sector where it is up against compatriots such as Toshiba, Panasonic and Sharp.
"Japanese companies are forced to cut prices and have only slim margins amid too much competition," said Hiroshi Watanabe, economist at Daiwa Institute of Research.
The Japanese government has recognised the need for consolidation and is promoting M&As because it sees the need for more reorganisation in a wide range of domestic industries, including materials and electrical machinery.
Tokyo is looking to encourage more mergers and acquisitions by simplifying the tender offer process, speeding up anti-monopoly vetting of merger plans and providing loans for deals, Japanese media reports said this week.
The number of mergers and acquisitions by Japanese firms tumbled 13 percent on-year to 1,707 in 2010, slipping far below a recent peak of 2,775 in 2006, according to M&A advisory firm Recof Corp, the Nikkei business daily reported.
But merger efforts have met with failure in the past year, with executives on both sides unable to iron out integration problems.
Shinsei Bank and Aozora Bank last year scrapped a merger plan because they could not agree on a business strategy.
Japanese drink giants Kirin Holding Co. and Suntory Holdings Ltd. last year abandoned ambitious plans to merge and create one of the world's biggest brewers, unable to overcome differences over who would own and manage the future company.
However, on Thursday drinks maker Sapporo announced it would boost its stake in soft drink firm Pokka, the latest in a series of deals in a shrinking market where players are searching for growth.
While it is important to expand scale in the way Nippon Steel and Sumitomo Metal plan to as they seek more control over prices, a balance needs to be struck to retain enough domestic competition to drive innovation, analysts say.
In particular, Japan must not risk ceding its advantage in high-end products where it still has a commanding share, analysts say. Its steel is seen a symbol of its manufacturing expertise.
Toyota buys nearly 60 percent of its sheet steel for auto bodies from Nippon Steel and Sumitomo, analysts say, and Mazda and Honda buy around 70 percent.
On the other hand, "anybody can make construction steel, and a dizzying array of companies do," said Smith.
(sourced:AFP)
Friday, February 4, 2011
Japanese Steel Takeover Driven by `Radical' Shift as Costs Rise
Feb 4, 2011 2:12 PM GMT+0530
By Masumi Suga and Rebecca Keenan
Nippon Steel Corp. and Sumitomo Metal Industries Ltd.’s plan to create the world’s second-largest steelmaker is aimed at gaining leverage over raw-material purchases and metal pricing as costs soar. Shares in both companies surged the most in more than two years today.
Based on Sumitomo’s market value and net debt, the deal would be worth more than 2 trillion yen ($24.5 billion), according to data compiled by Bloomberg. Yesterday’s announcement of the accord, which may be Japan’s biggest non- bank takeover, said it would be completed by October 2012.
Steelmakers in Japan, the world’s second-biggest producer of the alloy, are seeing profits squeezed while market-leader China encourages consolidation to create globally competitive companies. Rising costs for iron ore and coking coal used to make steel forced Nippon Steel to cut its full-year earnings forecast last week. Sumitomo Metal did the same today.
“The purpose of this merger is to fend off competition from rivals in China, South Korea and India,” said Takashi Murata, an analyst at Daiwa Securities Capital Markets Co. in Tokyo. A bigger company has more clout to negotiate raw-material costs and set steel prices for buyers including automakers, he said.
Share Reaction
Sumitomo Metal Industries rose 16 percent to 224 yen at the close of trading in Tokyo for the biggest advance since Oct. 30, 2008. Nippon Steel ended at 313 yen, up 9.1 percent, after rising as much as 14.3 percent, the most since Oct. 28, 2008.
Before today, Nippon Steel shares had fallen 16 percent in the past year, compared with a 3.2 percent decline for Luxembourg-based ArcelorMittal and a 17 percent drop for South Korea’s Posco, the world’s third-biggest producer. Sumitomo Metal had fallen 26 percent in the year before today.
The proposed merger between Sumitomo Metal Industries and Nippon Steel will create synergies for both companies as well as benefit “the wider steel industry by helping to increase pricing and margins,” Goldman Sachs Group Inc. analysts Rajeev Das and Nana Hasegawa said in a report today.
The merger is positive for Nippon Steel because of benefits arising from the combined size of the two companies, Standard & Poor’s said today in a statement.
‘Radical Change’
A combination of the two producers, which haven’t outlined terms of the transaction, would form the world’s second-largest steelmaker, based on output of 47.8 million metric tons in 2010, Sumitomo Metal Industries President Hiroshi Tomono said at a press briefing yesterday. ArcelorMittal is the biggest producer.
“We see a radical change in the business environment surrounding the Japanese steel industry,” Muneoka told reporters at the briefing.
Nippon Steel, formerly the world’s second-largest steelmaker by production, lost that rank in 2009 after being overtaken by five Chinese mills, according to the American Institute for International Steel.
Meantime, rivals are expanding, with South Korea’s Posco on Jan. 31 winning approval for a $12 billion steel plant in India, the biggest single foreign investment in the country.
“It’s very important Japanese steelmakers be globally competitive,” said Japanese Economy Minister Kaoru Yosano today. The planned merger of Nippon Steel and Sumitomo Metal Industries is “welcomed” he said.
Steel Demand
Steel consumption may rise 5.3 percent this year to a record, according to World Steel Association forecasts. Iron ore prices rose last year after Rio Tinto Group, BHP Billiton Ltd. and Vale SA, the biggest suppliers, shifted away from annual pricing to quarterly agreements.
The price of iron ore will be 21 percent higher on average this year, Credit Suisse Group AG said in a Jan. 7 report. The spot price of ore delivered to China including freight will average $178 a ton, the report forecast. That compares with $147 in 2010, according to The Steel Index.
Floods in Australia’s Queensland state closed mines and further pushed up coking-coal prices. Free-on-board prices may surge to $400 a ton for the three-month contract starting April 1, from $225 this quarter, Bank of America Merrill Lynch said last month.
“It’s all about lowering costs and enhancing margins,” Gavin Wendt, a senior resources analyst at Mine Life Pty in Sydney, said by phone. “While demand for steel is quite strong, one of the problems for steelmakers around the world is rising costs. It may give them more leverage when it comes to dealing with the miners.”
(sourced: bloomberg.com)
By Masumi Suga and Rebecca Keenan
Nippon Steel Corp. and Sumitomo Metal Industries Ltd.’s plan to create the world’s second-largest steelmaker is aimed at gaining leverage over raw-material purchases and metal pricing as costs soar. Shares in both companies surged the most in more than two years today.
Based on Sumitomo’s market value and net debt, the deal would be worth more than 2 trillion yen ($24.5 billion), according to data compiled by Bloomberg. Yesterday’s announcement of the accord, which may be Japan’s biggest non- bank takeover, said it would be completed by October 2012.
Steelmakers in Japan, the world’s second-biggest producer of the alloy, are seeing profits squeezed while market-leader China encourages consolidation to create globally competitive companies. Rising costs for iron ore and coking coal used to make steel forced Nippon Steel to cut its full-year earnings forecast last week. Sumitomo Metal did the same today.
“The purpose of this merger is to fend off competition from rivals in China, South Korea and India,” said Takashi Murata, an analyst at Daiwa Securities Capital Markets Co. in Tokyo. A bigger company has more clout to negotiate raw-material costs and set steel prices for buyers including automakers, he said.
Share Reaction
Sumitomo Metal Industries rose 16 percent to 224 yen at the close of trading in Tokyo for the biggest advance since Oct. 30, 2008. Nippon Steel ended at 313 yen, up 9.1 percent, after rising as much as 14.3 percent, the most since Oct. 28, 2008.
Before today, Nippon Steel shares had fallen 16 percent in the past year, compared with a 3.2 percent decline for Luxembourg-based ArcelorMittal and a 17 percent drop for South Korea’s Posco, the world’s third-biggest producer. Sumitomo Metal had fallen 26 percent in the year before today.
The proposed merger between Sumitomo Metal Industries and Nippon Steel will create synergies for both companies as well as benefit “the wider steel industry by helping to increase pricing and margins,” Goldman Sachs Group Inc. analysts Rajeev Das and Nana Hasegawa said in a report today.
The merger is positive for Nippon Steel because of benefits arising from the combined size of the two companies, Standard & Poor’s said today in a statement.
‘Radical Change’
A combination of the two producers, which haven’t outlined terms of the transaction, would form the world’s second-largest steelmaker, based on output of 47.8 million metric tons in 2010, Sumitomo Metal Industries President Hiroshi Tomono said at a press briefing yesterday. ArcelorMittal is the biggest producer.
“We see a radical change in the business environment surrounding the Japanese steel industry,” Muneoka told reporters at the briefing.
Nippon Steel, formerly the world’s second-largest steelmaker by production, lost that rank in 2009 after being overtaken by five Chinese mills, according to the American Institute for International Steel.
Meantime, rivals are expanding, with South Korea’s Posco on Jan. 31 winning approval for a $12 billion steel plant in India, the biggest single foreign investment in the country.
“It’s very important Japanese steelmakers be globally competitive,” said Japanese Economy Minister Kaoru Yosano today. The planned merger of Nippon Steel and Sumitomo Metal Industries is “welcomed” he said.
Steel Demand
Steel consumption may rise 5.3 percent this year to a record, according to World Steel Association forecasts. Iron ore prices rose last year after Rio Tinto Group, BHP Billiton Ltd. and Vale SA, the biggest suppliers, shifted away from annual pricing to quarterly agreements.
The price of iron ore will be 21 percent higher on average this year, Credit Suisse Group AG said in a Jan. 7 report. The spot price of ore delivered to China including freight will average $178 a ton, the report forecast. That compares with $147 in 2010, according to The Steel Index.
Floods in Australia’s Queensland state closed mines and further pushed up coking-coal prices. Free-on-board prices may surge to $400 a ton for the three-month contract starting April 1, from $225 this quarter, Bank of America Merrill Lynch said last month.
“It’s all about lowering costs and enhancing margins,” Gavin Wendt, a senior resources analyst at Mine Life Pty in Sydney, said by phone. “While demand for steel is quite strong, one of the problems for steelmakers around the world is rising costs. It may give them more leverage when it comes to dealing with the miners.”
(sourced: bloomberg.com)
Thursday, February 3, 2011
Nippon, Sumitomo Metal merging to create No.2 steelmaker
Thu Feb 3, 2011 10:35am GMT* Merged company would trail only ArcelorMittal in global steel output
* Nippon Steel, Sumitomo Metal aim to merge in Oct 2012
* Japan steelmakers face stiff competition from Asian rivals
* Merged company would have unmatched product lineup - analysts
By Junko Fujita
TOKYO, Feb 3 (Reuters) - Japan's Nippon Steel Corp and Sumitomo Metal Industries plan to merge to create the world's second-largest steelmaker in an effort to fend off tough competition from Asian rivals and offset shrinking demand from domestic automakers.
The deal, which would likely see Japan's top steelmaker Nippon Steel acquiring Sumitomo Metal, comes as the industry grapples with surging raw materials prices, exacerbated recently by floods in Australia.
Japanese steelmakers have been particularly hard hit as domestic automakers such as Toyota Motor Corp and Nissan Motor Co build fewer cars at home and expand in emerging markets such as India using products from local steelmakers.
They also face cut-throat competition from South Korea's POSCO and Baoshan Iron & Steel Co , China's biggest listed steelmaker, as Japanese automakers seek lower prices to weather an unfavorably strong yen.
Analysts, as well as Japanese government officials and politicians, welcomed the plans for the merger, which is subject to approval from Japan's Fair Trade Commission (FTC).
"The new group has a chance to become very competitive in Asia," said CLSA analyst Jeremie Capron, adding there was room for Sumitomo Metal to cut costs with the help of Nippon Steel.
"The merged company will have the best product line-up in the industry ranging from construction steel, auto steel sheets, thick plates to seamless pipes. That's quite unique, and the No.1 company, ArcelorMittal , does not have such a product line-up."
Nippon Steel, whose main customers include Japanese automakers, and Sumitomo Metal Industries, which is strong in seamless pipes used in the energy, construction and machinery sectors, said they aimed to merge in October 2012.
Nippon Steel and Japan's No.2 JFE Holdings last week cuts their outlooks for the year to March, citing rising costs of coking coal and iron ore.
"INDUSTRY GOLIATHS"
Nippon Steel executives had said the company was looking to deepen cooperation with Sumitomo Metal and Kobe Steel Ltd , with which it has some operational partnerships, but had cited objection from the FTC for its inability to do so.
The merged company would rank No.2 in the world, with a combined crude steel output of 47.8 million tonnes last year, Sumitomo Metal Industries President Hiroshi Tomono said at a news conference in Tokyo. It will employ more than 75,000 people.
That would still be about half the production of top-ranked ArcelorMittal but place the group ahead of Baosteel. Based on 2009 crude steel production, Nippon Steel ranked fourth in the world and Sumitomo Metal placed 19th, according to the World Steel Association.
"These are two industry goliaths. The merger of these two titans of industry looks designed to exceed anything the Chinese can do," said John Meyer, a London-based analyst at investment bank Fairfax.
"The integration...combines the production and technical skills of both companies to produce better-quality products more efficiently and more effectively. Other steel producers will struggle to compete with the new efficiencies of scale and services being offered by the joining of these titans," he added.
Nippon Steel, with a market capitalisation $24 billion, and Sumitomo Metal, valued at $11 billion, already hold minority stakes in each other.
They have not yet decided the merger ratio.
Nippon Steel President Shoji Muneoka told a news conference that he expected the FTC to approve the merger, given that the two firms have different product strengths.
Muneoka also said the relationship with Kobe Steel, in which Nippon Steel holds a stake of 3.4 percent, would be maintained.
Rival JFE said it supported the merger and Japanese Trade Minister Banri Kaieda said it had his blessing.
"The merger aims to strengthen global competitiveness through reorganisations of operations as global competition heats up in the steel industry," he said.
"I value such a move highly because it is line with our 'new growth strategy' aimed at realising a strong economy."
JFE unit JFE Steel was the last major merger in the Japanese steel industry, when Kawasaki Steel and NKK combined in 2002 to form what is now the world's fifth biggest steelmaker. (Additional reporting by Chang-Ran Kim, Yuko Inoue, Chikako Mogi, Nathan Layne in TOKYO, Nick Trevethan in SINGAPORE, Ploy Ten Kate in BANGKOK; Editing by Edwina Gibbs and Lincoln Feast)
Japan steel mills see output 28.4 mln T in Jan-Mar
Wed Feb 2, 2011 1:53am EST
* Plan for 2.6 pct bigger output than Oct-Dec
* Exceeds METI estimate by 5.6 pct
* Plans may not fully reflect impact of floods -METI
TOKYO, Feb 2 (Reuters) - Japanese steelmakers' buoyant production may continue into the current quarter on strong demand from Asia, despite supply disruptions of coal from Australia that have forced them to rely on the costlier spot market.
A government poll of about 60 big Japanese steelmakers released on Wednesday showed the companies plan to produce 28.40 million tonnes of crude steel in January-March, up 2.6 percent from the previous quarter.
The figure is 5.6 percent above an estimate by the Ministry of Economy, Trade and Industry revealed last month of 26.88 million tonnes.
A ministry official said the survey on output plans was conducted before the magnitude of the impact of the devastating floods in Australia became clear, and revisions of the plan were possible.
Japanese steelmakers, which rely on Australia for 60 percent of their coking coal needs, have said they have secured enough coal stocks to run until the end of March unless there are further floods or damage to infrastructure in the country.
Japanese companies are boosting coking coal purchases from alternative sources such as the United States, Canada, China and Indonesia, relying on the spot market in some cases.
Nippon Steel Corp (5401.T) and JFE Holdings Inc (5411.T) kept their 2010/11 production plans unchanged when they announced steep downward revisions in their earnings outlooks last week. (Reporting by Yuko Inoue; Editing by Michael Watson)
* Plan for 2.6 pct bigger output than Oct-Dec
* Exceeds METI estimate by 5.6 pct
* Plans may not fully reflect impact of floods -METI
TOKYO, Feb 2 (Reuters) - Japanese steelmakers' buoyant production may continue into the current quarter on strong demand from Asia, despite supply disruptions of coal from Australia that have forced them to rely on the costlier spot market.
A government poll of about 60 big Japanese steelmakers released on Wednesday showed the companies plan to produce 28.40 million tonnes of crude steel in January-March, up 2.6 percent from the previous quarter.
The figure is 5.6 percent above an estimate by the Ministry of Economy, Trade and Industry revealed last month of 26.88 million tonnes.
A ministry official said the survey on output plans was conducted before the magnitude of the impact of the devastating floods in Australia became clear, and revisions of the plan were possible.
Japanese steelmakers, which rely on Australia for 60 percent of their coking coal needs, have said they have secured enough coal stocks to run until the end of March unless there are further floods or damage to infrastructure in the country.
Japanese companies are boosting coking coal purchases from alternative sources such as the United States, Canada, China and Indonesia, relying on the spot market in some cases.
Nippon Steel Corp (5401.T) and JFE Holdings Inc (5411.T) kept their 2010/11 production plans unchanged when they announced steep downward revisions in their earnings outlooks last week. (Reporting by Yuko Inoue; Editing by Michael Watson)
Friday, January 28, 2011
Nippon Steel, JFE Cut Profit Forecasts on Coal Cost
Friday - Jan 28, 2011
By Masumi Suga and Yasumasa Song, Reuters
Net income at Nippon Steel will be about 95 billion yen ($1.15 billion) for the financial year ending March 31, missing its Oct. 27 estimate of 130 billion yen, the Tokyo-based company said today in a statement. JFE reduced its full-year profit forecast by 36 percent to 70 billion yen.
Coking coal prices may rise as much as 78 percent next quarter on disruptions from flooding in Australia, the Bank of America Merrill Lynch said. Japanese steelmakers, which rely on Australian imports for about 60 percent of their coking coal, are seeking alternative supplies from North America and Russia. Iron ore prices have more than doubled in the past two years.
“In addition to rising raw material prices, tightening coking coal supplies due to heavy rains in Australia pushes up costs,” Yoshio Ishikawa, executive vice president, told reporters today in Tokyo.
Third-quarter profit rose to 33.4 billion yen from 25.9 billion yen a year earlier, Nippon Steel said in the statement. JFE Holdings reported a 32 percent decline in quarterly profit to 18.5 billion yen, according to Bloomberg calculation based on the nine-month result released today by the Tokyo-based company.
JFE shares dropped 3.3 percent to 2,643 yen, the biggest decline since Aug. 31 as of the 3 p.m. trading close on the Tokyo Stock Exchange. Nippon Steel fell 2.1 percent to 285 yen.
Weak Prices
Nippon Steel expects the average price of steel will remain little changed at about 81,000 a metric ton in the current quarter, after a 5.8 percent decline from the previous quarter ended Dec. 31, according to its statement. The average price JFE got for its steel fell 2.8 percent to 79,300 yen in the third quarter from the previous three months and is expected to be about 79,000 yen this quarter.
While market prices are rising, the company’s contracted product prices little reflect this gain, Nippon Steel Executive Vice President Shinichi Taniguchi said today. The company plans to raise prices in April, he said, without giving details.
China’s domestic prices for hot-rolled coil, a benchmark steel product, were unchanged at 4,868 yuan a ton today, according to Beijing Antaike Information Development Co. They have risen about 25 percent in the past six months.
Posco, South Korea’s largest steelmaker, this month reported a worse-than-expected drop in quarterly profit after raw material costs gained and demand from builders and home- appliances makers waned.
Australian free-on-board coking coal prices may increase to $400 a metric ton for three-month contracts starting April 1, from $225 a ton this quarter, Merrill Lynch analysts led by Sydney-based Alex Tonks said in a report dated Jan. 25. This compares with the bank’s Jan. 11 forecast of $330 a ton for the second quarter.
Still, the weather’s “impact on coking coal won’t likely continue,” once the season changes, and the short term cut in steel output caused by the flooding will help steelmakers boost prices, according to Shinya Yamada, an analyst at Credit Suisse Securities Japan Ltd.
Flooding has inundated about three-quarters of Queensland, shutting mines, damaging crops and prompting BHP Billiton Ltd. and Rio Tinto Group to declare force majeure, a legal clause that allows producers to miss deliveries. The region is the world’s largest exporter of seaborne coal.
Sumitomo Metal Industries Ltd. and Kobe Steel Ltd., Japan’s third- and fourth-largest steelmakers, are scheduled to report nine-month results and full-year outlook on Feb. 3. (sourced:Bloomberg)
By Masumi Suga and Yasumasa Song, Reuters
Nippon Steel Corp. and JFE Holdings Inc., Japan’s two largest mills, cut their full-year profit forecasts after prices fell and record rains and floods in Australia pushed up the cost of steelmaking coal.
Net income at Nippon Steel will be about 95 billion yen ($1.15 billion) for the financial year ending March 31, missing its Oct. 27 estimate of 130 billion yen, the Tokyo-based company said today in a statement. JFE reduced its full-year profit forecast by 36 percent to 70 billion yen.
Coking coal prices may rise as much as 78 percent next quarter on disruptions from flooding in Australia, the Bank of America Merrill Lynch said. Japanese steelmakers, which rely on Australian imports for about 60 percent of their coking coal, are seeking alternative supplies from North America and Russia. Iron ore prices have more than doubled in the past two years.
“In addition to rising raw material prices, tightening coking coal supplies due to heavy rains in Australia pushes up costs,” Yoshio Ishikawa, executive vice president, told reporters today in Tokyo.
Third-quarter profit rose to 33.4 billion yen from 25.9 billion yen a year earlier, Nippon Steel said in the statement. JFE Holdings reported a 32 percent decline in quarterly profit to 18.5 billion yen, according to Bloomberg calculation based on the nine-month result released today by the Tokyo-based company.
JFE shares dropped 3.3 percent to 2,643 yen, the biggest decline since Aug. 31 as of the 3 p.m. trading close on the Tokyo Stock Exchange. Nippon Steel fell 2.1 percent to 285 yen.
Weak Prices
Nippon Steel expects the average price of steel will remain little changed at about 81,000 a metric ton in the current quarter, after a 5.8 percent decline from the previous quarter ended Dec. 31, according to its statement. The average price JFE got for its steel fell 2.8 percent to 79,300 yen in the third quarter from the previous three months and is expected to be about 79,000 yen this quarter.
While market prices are rising, the company’s contracted product prices little reflect this gain, Nippon Steel Executive Vice President Shinichi Taniguchi said today. The company plans to raise prices in April, he said, without giving details.
China’s domestic prices for hot-rolled coil, a benchmark steel product, were unchanged at 4,868 yuan a ton today, according to Beijing Antaike Information Development Co. They have risen about 25 percent in the past six months.
Posco, South Korea’s largest steelmaker, this month reported a worse-than-expected drop in quarterly profit after raw material costs gained and demand from builders and home- appliances makers waned.
Australian free-on-board coking coal prices may increase to $400 a metric ton for three-month contracts starting April 1, from $225 a ton this quarter, Merrill Lynch analysts led by Sydney-based Alex Tonks said in a report dated Jan. 25. This compares with the bank’s Jan. 11 forecast of $330 a ton for the second quarter.
Still, the weather’s “impact on coking coal won’t likely continue,” once the season changes, and the short term cut in steel output caused by the flooding will help steelmakers boost prices, according to Shinya Yamada, an analyst at Credit Suisse Securities Japan Ltd.
Flooding has inundated about three-quarters of Queensland, shutting mines, damaging crops and prompting BHP Billiton Ltd. and Rio Tinto Group to declare force majeure, a legal clause that allows producers to miss deliveries. The region is the world’s largest exporter of seaborne coal.
Sumitomo Metal Industries Ltd. and Kobe Steel Ltd., Japan’s third- and fourth-largest steelmakers, are scheduled to report nine-month results and full-year outlook on Feb. 3. (sourced:Bloomberg)
Tuesday, January 18, 2011
Japan's JFE steel corp: boosting coal buying from U.S., China, Russia
Tue Jan 18, 2011 8:27am GMT
*JFE relies on Australia for 80 pct of its coking coal needs
*JFE 10/11 profit may undershoot forecast by 10 pct -paper (Adds profit estimate, shares)
TOKYO Jan 18 (Reuters)
Japan's JFE Steel Corp (5411.T: Quote) said on Tuesday it is boosting purchases of coking coal from the United States, China, Russia and Indonesia after heavy floods hit production sites in Australia, its biggest supplier.
A company spokesman made the comment to Reuters.
He declined to say if JFE, the world's fifth-biggest steelmaker, is buying on the spot market or boosting purchases under long-term contracts.
JFE relies on Australia, which has been hit by heavy flooding in the main coking coal state of Queensland, for about 80 percent of its coking coal needs, equivalent to around 17 million tonnes a year.
A spike in the spot price could hurt steelmakers' earnings in early 2011.
The Nikkei business daily said on Tuesday that profits of JFE and Nippon Steel Corp (5401.T: Quote), the world's No.4 steelmaker, could undershoot their forecasts in the year to March 31 due to rises in iron ore and coal prices, making the steel sector the worst-performing sector on the Tokyo Stock Exchange on Tuesday.
The Nikkei said Nippon Steel's recurring profit -- which is pretax and before special items -- is expected to be around 220 billion yen ($2.66 billion) this financial year, about 30 billion yen lower than its forecast, while JFE's recurring profit may total around 200 billion yen, missing its forecast by 20 billion yen.
That compares with a mean estimate for Nippon Steel of 256.3 billion yen in a survey of 20 analysts in Thomson Reuters I/B/E/S. A mean estimate for JFE's profit is 224.5 billion yen in a poll of 21 analysts.
Shares in Nippon Steel, the world's No.4 steelmaker, tumbled 1.4 percent to 293 yen, while JFE fell 1.4 percent to 2,787 yen. ($1=82.66 Yen)
(Reporting by Yuko Inoue Editing by Michael Watson)
*JFE relies on Australia for 80 pct of its coking coal needs
*JFE 10/11 profit may undershoot forecast by 10 pct -paper (Adds profit estimate, shares)
TOKYO Jan 18 (Reuters)
Japan's JFE Steel Corp (5411.T: Quote) said on Tuesday it is boosting purchases of coking coal from the United States, China, Russia and Indonesia after heavy floods hit production sites in Australia, its biggest supplier.
A company spokesman made the comment to Reuters.
He declined to say if JFE, the world's fifth-biggest steelmaker, is buying on the spot market or boosting purchases under long-term contracts.
JFE relies on Australia, which has been hit by heavy flooding in the main coking coal state of Queensland, for about 80 percent of its coking coal needs, equivalent to around 17 million tonnes a year.
A spike in the spot price could hurt steelmakers' earnings in early 2011.
The Nikkei business daily said on Tuesday that profits of JFE and Nippon Steel Corp (5401.T: Quote), the world's No.4 steelmaker, could undershoot their forecasts in the year to March 31 due to rises in iron ore and coal prices, making the steel sector the worst-performing sector on the Tokyo Stock Exchange on Tuesday.
The Nikkei said Nippon Steel's recurring profit -- which is pretax and before special items -- is expected to be around 220 billion yen ($2.66 billion) this financial year, about 30 billion yen lower than its forecast, while JFE's recurring profit may total around 200 billion yen, missing its forecast by 20 billion yen.
That compares with a mean estimate for Nippon Steel of 256.3 billion yen in a survey of 20 analysts in Thomson Reuters I/B/E/S. A mean estimate for JFE's profit is 224.5 billion yen in a poll of 21 analysts.
Shares in Nippon Steel, the world's No.4 steelmaker, tumbled 1.4 percent to 293 yen, while JFE fell 1.4 percent to 2,787 yen. ($1=82.66 Yen)
(Reporting by Yuko Inoue Editing by Michael Watson)
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