Japan: Nippon Steel reports growth in crude steel production in FY'23

Nippon Steel, Japan's leading steel manufacturer, has released its financial report for financial year 2023 (FY'23). The company saw a modest rise in non-consolidated crude steel production and steel shipments in FY'23.

Highlights:

• The company's non-consolidated crude steel production stands at 34.99 million tonnes (mnt) in FY'23, up by 2% y-o-y against 34.25 mnt in FY'22. However, on quarterly basis the same edged down by 1% q-o-q to 8.71 mnt in fourth quarter of financial year 2023 (Q4FY'23) as compared to 8.84 mnt in Q3FY'23.
  
  
• The steel major's non-consolidated steel shipments for FY'23 grew by 2% y-o-y to 32.03 mnt as of 31.47 mnt in FY'22. Whereas, the same inched down by 1% q-o-q to 7.90 mnt in Q4FY'23 against 7.95 mnt in the last quarter.
  
  
• The consolidated profit of the company for FY'23 decreased by 5% y-o-y to JPY 869.6 billion ($5.58 billion) as compared to JPY 916.4 billion ($5.88 billion) in FY'22. Moreover, for the fourth quarter the same fell by 11% q-o-q to JPY 177.2 billion ($1.13 billion) in Q4FY'23 against JPY 198.1 ($1.27 billion) in Q3FY'23. However, the company has fulfilled its anticipation, crossing a consolidated profit of JPY 800 billion ($5.13 billion).
  
  

Global slowdown, steel market challenges

In FY'23, the global economy experienced a further slowdown due to ongoing geopolitical issues. However, the Japanese economy saw a moderate recovery, but domestic demand remained weak. The second half of FY'23 saw an unprecedented decline in steel demand. This decline worsened towards the end of the year due to the slowdown in China, a major consumer of steel, impacted demand. Weakening economic outlook in the United States and Europe further dampened demand.

Outlook

Nippon Steel's business environment is expected to remain sluggish in FY'24, with both domestic and overseas demand staying at low levels. Despite the challenging conditions, the underlying business profit forecast is expected to be over JPY 750 billion ($4.81 billion).

In FY'25, business profit is expected to recover and most reorganization losses eliminated. Moreover, Nippon Steel is targeting a business profit exceeding JPY 900 billion ($5.78 billion) in FY'25. They plan to achieve this by implementing several measures to boost profits, including the continuing benefits of structural reforms, optimising their product mix and increasing production at AMNS India. Furthermore, Nippon Steel aims to solidify their business profit towards their long-term vision of 1 trillion by finalising the acquisition of U.S. Steel and integrating its profits.