Kobe Steel sees 08/09 loss on inventory appraisal

TOKYO, April 7 (Reuters) - Kobe Steel Ltd (5406.T), Japan's fourth-biggest steelmaker, downgraded its earnings estimate on Tuesday for the year ended March 31 to a net loss, citing an appraisal loss on inventories as well as impairment charges on stockholdings and fixed assets.

Kobe Steel, a diversified steelmaker also strong in aluminium, copper products and construction machinery, now sees a net loss of 32 billion yen ($320 million) for the 2008/09 business year instead of a net profit of 13 billion yen it forecast earlier. [nT74UI0L6].

Steelmakers are expected to suffer huge appraisal losses on their high-priced inventories in the year that started on April 1 as the cost of iron ore and coal, their major inputs, will likely fall sharply in the new business year amid sluggish demand, slashing the value of their inventories.

Some analysts had thought steelmakers might bring forward part of the valuation losses to the 2008/09 year ended in March to lighten the expected heavy inventory burden in the 2009/10 business year.

Most analysts expect Japan's top four steelmakers, led by the world No.2 Nippon Steel Corp (5401.T), to tumble into massive losses in the current business year hit by huge valuation losses on their inventories, a decline in profit margins and lower output.

Kobe Steel said it would also post an impairment charge of 15.6 billion yen on a copper sheet production line and other assets and an appraisal loss on its stockholdings of 17 billion yen.

It slashed its revenue forecast to 2.17 trillion yen from 2.2 trillion yen due to sluggish demand and a delay in sales of some machinery products into the next business year. ($1=100.60 Yen) (Reporting by Yuko Inoue; Editing by Michael Watson)