November 21, 2008
Nippon Steel outlook for fiscal year ending March 31st 2009
Nippon Steel recently released falling outlook for financial year ending on March 2009
It said that “In fiscal 2008, it will be important to continue to monitor closely the ripple effects of the subprime loan problem, but we look for the global economic expansion, led by emerging countries in particular, to stay on track and for steel demand in Japan and overseas to remain firm. Yet, we also expect increases in raw material procurement costs of an unprecedented magnitude as structural problems stemming from the burgeoning expansion of gross steel production volumes in Brazil, Russia, India, and, above all, China worsen. More specifically, we expect this rapid increase in gross steel production volumes in the BRICs to lead to even tighter supply and demand for raw materials and greater ocean freight volumes. This outlook takes into account our recent acceptance of a sharp 65% price increase for some iron ore procurement agreements, compared with the price in fiscal 2007.”
It added that “In light of the tightening supply and demand picture for raw materials and fuels, we will work to secure the necessary supplies and do everything we can to ensure we remain a stable supplier of steel products to our customers. We are carefully explaining these market conditions to all of our customers and continue to make every effort to reduce costs through in-house initiatives, and we are in talks with our customers to raise our selling prices for steel products based on supply and demand trends for steel materials and the divergence between domestic and foreign steel prices.”
Nippon also said that “In business fields outside of steelmaking and steel fabrication, we are concentrating on maximizing the improvement in our earnings by directing management resources based on the specific characteristics of each business and swift action in response to changes in the business environment.”
The release added that “The Nippon Steel Group continues to be both flexible in making investments and in enhancing and upholding the soundness of its financial position. Through the expansion of our technological edge and active expansion of overseas businesses, as evidenced by the recent agreement to build a new No. 3 hot-dip galvanizing line at Baosteel NSC Arcelor Automotive Steel Sheets Co Ltd, we are cementing our strong presence among the leaders in the global steel industry. We at Nippon Steel greatly appreciate your understanding of the conditions that currently face us and look forward to your continued support.”
