Japan's JFE cuts annual profit forecast on slow local demand, slumping Asia market

JFE Holdings

06/11/2024 10:58

TOKYO, Nov 6 (Reuters) - Japan's second-biggest
steelmaker, JFE Holdings  5411.T , lowered its forecast for
annual net profit by 37%, hit by slow demand for building
materials at home and a slumping Asian market amid growing
exports from China.
    The company now predicts net profit of 130 billion yen 
($844 million) for the fiscal year to March 31, down from its
August estimate of 205 billion yen.
    JFE also cut its annual dividend forecast to 100 yen a share
from its August forecast of 110 yen, while reducing its crude
steel output plan on parent-basis to 22.4 million metric tons,
down 0.6 million tons from its earlier estimate.
    "Demand for building materials in Japan is expected to
weaken further in the second half, due to rising construction
costs and labour shortages," Executive Vice President Masashi
Terahata told a news conference.
    "In overseas, China's oversupply and rising exports have
deteriorated steel market in Southeast Asia ... We are feeling a
sense of crisis," he said, adding that the market was not likely
to recover before next March.
    Net profit for the six months ended on Sept. 30 fell 61%
from a year earlier to 42.49 billion yen. 
    Japanese steel industry sources have said weak domestic
demand has encouraged China to offload its surplus stocks by
offering competitive prices to overseas buyers. 
    Japan may take trade action if needed in response to growing
steel exports from China, the world's biggest steel producer, an
official of its industry ministry said in October.
 ($1=154.0600 yen)

 (Reporting by Yuka Obayashi; Editing by Clarence Fernandez)
 ((Yuka.Obayashi@thomsonreuters.com; +813-6441-1798; Reuters
Messaging: yuka.obayashi.thomsonreuters.com@reuters.net))