By Yuka Obayashi
TOKYO, Feb 6 (Reuters) - Japan's second-biggest
steelmaker JFE Holdings Inc lowered its forecasts for
crude steel output and full-year profit on Monday, blaming slack
overseas prices and weak demand at home.
"We have been facing a tough environment since last quarter
with slow activity in Japan and delays in recovery in overseas
markets," JFE Holdings Executive Vice President Masashi Terahata
told a news conference.
Given weaker demand, JFE slashed its crude steel output
plans to 24 million tonnes for the year to March 31 from 25
million, and lowered its net profit estimate by 5 billion yen to
150 billion yen ($1.1 billion).
For the nine months to Dec. 31, net profit fell 35.5% to 144
billion yen.
"Despite lower output and slumping metal spread in China, we
managed to improve our spread by raising product prices to pass
on soaring expenses," Terahata said.
For the current year, JFE expects average product prices to
rise to 131,000 yen a tonne, against 103,700 yen a year earlier.
South Korean rival POSCO Holdings last month
reported a 46.7% drop in operating profit for 2022.
JFE also said it would invest 50 billion yen to boost
production capacity of electrical steel sheet, used in electric
vehicles (EVs), at its Kurashiki plant in western Japan.
That follows its 2021 decision to spend 49 billion yen to
double capacity at the plant. After the second expansion is
completed by March 2027, output capacity will triple from
current levels.
"We want to take various measures to bolster output as
demand for high-grade non-oriented electrical steel sheets used
in EVs is expected to grow strongly," Terahata said.
JFE is also studying the feasibility of a joint venture in
India with partner JSW Steel to produce electrical
steel sheets used in power plant transformers, he said.
($1 = 132.1700 yen)
(Reporting by Yuka Obayashi
Editing by Bernadette Baum)
Messaging: yuka.obayashi.thomsonreuters.com@reuters.net))
