Japan's JFE cuts FY26 profit forecast after weather damage hits steel output
Japan's JFE cuts FY26 profit forecast after weather damage hits steel output TOKYO, Nov 6 (Reuters) - JFE Holdings 5411.T, Japan's second-biggest steelmaker, cut its fiscal 2026 net profit forecast by 13% on Friday after torrential rain and a typhoon damaged a blast furnace during the summer, reducing crude steel output by 700,000 metric tons.
JFE now expects net profit of 130 billion yen ($823 million) for the year ending March 2027, down from its August forecast of 150 billion yen. It also lowered its parent-based crude steel output estimate to 20.8 million tons from 21.5 million tons
Net profit for the April-September first half doubled from a year earlier to 53.8 billion yen
Heavy rain in August and a typhoon in September damaged facilities at its steelworks in Chiba, near Tokyo, resulting in a 50-billion-yen hit from lower shipments and higher costs, including repairs
"Chiba was struck by successive bouts of torrential rain and a typhoon, causing significant disruption," Chief Financial Officer Toshihiro Tanaka told reporters
"Restoration work on the facilities has been completed, but it will taka a little longer for deliveries to customers to return to normal," he said
Overproduction in China is capping price gains in Asia, weighing on JFE's exports, Takana said
In India, steel demand remains strong, driven by domestic consumption, including the auto sector, and investment, while market conditions remain stable, he said
In October, JFE and partner JSW Steel JSTL.NS said their joint venture would expand crude steel production capacity at the Sambalpur, Odisha, plant to 9.5 million tons a year from 4.5 million tons, with operations due to begin in 2030
For the October-March second half, JFE assumes iron ore prices of around $80 a ton and coking coal prices of around $260-$270 a ton, Takana said
($1 = 157.9000 yen)
(Reporting by Yuka Obayashi; Editing by Subhranshu Sahu)
((Yuka.Obayashi@thomsonreuters.com; +813-4520-1265;))