Japan: Nippon Steel posts drop in crude steel production, shipments in FY22

Japan's leading steelmaker, Nippon Steel, has announced its financial results for fiscal year 2022 (FY22 - 01 Apr'22-31 Mar'23) on 10 May, 2023. The company recorded a y-o-y decline in crude steel production and steel shipments in FY22.

Highlights:

• Non-consolidated crude steel production declined by 11% to 34.25 mnt in FY22 against 38.68 mnt in FY21. Production in Q4FY22 was 8.62 mnt, up by 0.4 % q-o-q compared with 8.59 mnt in the previous quarter.
  
  
• Non-consolidated steel shipments decreased by 11.5% y-o-y to 31.47 mnt in FY22 compared to 35.56 mnt in FY21. The same stood at 7.8 mnt in Q4CY22, down 2.3% q-o-q against 7.98 mnt in the previous quarter.
  
  
• The steel major's consolidated profit declined by JPY 21.7 bn ($0.16 billion) to JPY 916.4 bn ($6.77 billion) in FY22 versus JPY 938.1 bn ($6.93 billion) in FY21.
  
  

Expanding crude steel output

• The company targets to achieve non-consolidated crude steel production of 35 mnt in FY23.
  
  
• The full-year forecasts for underlying business profit for FY23 is expected to be JPY 800 bn. or more, a record high for the third consecutive year despite sluggish and unpredictable steel demand.
  
  
• The company has decided to expand production capacity of high-grade non-oriented electrical steel sheets at Setouchi Works Hanshin Area (Sakai) and Kyushu Works Yawata Area.
  
  
• The company has commenced operations at the new EAF in the Hirohata area, which will produce high-grade electrical steel sheets for the automotive industry.
  
  

AM/NS India: The company is working on further capacity expansion in AM/NS India and expects earnings recovery in the first quarter of FY23. In addition, the company is benefiting from its investments in AM/NS India by earning profits from the sale of surplus natural gas inventories.

Outlook: Japan's demand in construction and civil engineering remains stable due to large-scale construction in urban areas and robust demand for non-residential starts. Inventories are also being gradually depleted. As for auto production which was damaged by supply chain disruption, production continues to achieve y-o-y increase and demand seems to be recovering.

With steelmakers worldwide under pressure to cut emissions to combat climate change, Nippon Steel has set a target to reduce its CO2 emissions by 30% by 2030 compared to 2013.