(Updates with details, background)
* Cuts 2012/13 annual recurring profit forecast to Y45 bln
* Posts Q2 loss of Y5.8bln vs profit of Y25.2 bln yr ago
* JFE shares down over 20 percent since start of year
TOKYO, Oct 24 JFE Holdings Inc, Japan's
No.2 steelmaker, slashed its full-year profit f orecast i n half
on Wednesday due to worries that a delay in the recovery of
Asia's steel market and slower demand from carmakers will
A cooling of China's economy and oversupply of steel across
Asia has hit many of the region's steelmakers.
Japan's steel producers are also likely to suffer from a
decline in demand from carmakers after the government ended
incentives in September for environmentally friendly cars.
Political tensions between Japan and China - which erupted
last month after a row over disputed islands led to violent
anti-Japanese protests across China - have also hurt sales of
Japanese cars in China.
JFE, the world's ninth-biggest crude steel producer by
volume, swung to a recurring l oss o f 5 .8 billion y en, which is
pretax and before one-off items, in the July-September quarter
from a profit of 25.2 billion yen a year ago.
It expects 45 billion yen ($564.05 million) in recurring
profit for the year to March 2013, sharply below the 90 billion
yen it forecast three months ago.
Th e new figure is below a consensus estimate of 59.99
billion yen in a poll of 17 analysts in Thomson Reuters I/B/E/S,
and compares with year-ago profit of 52.98 billion yen.
On Tuesday, world No.4 steelmaker POSCO posted a
25 percent drop in quarterly profit, cut its annual sales and
investment outlooks and said the global steel market was
unlikely to recover sharply next year.
ArcelorMittal, the world's largest steelmaker,
will report on Oct. 31, while t op Japan rival N ippon Steel and
Sumitomo Metal Corp, which merged this month, will
report results on Nov. 9.
Shares in JFE have los t more than 20 percent this year,
underperforming the Nikkei average's more than 5 p ercent
ga in. As of 0520 GMT, JFE shares were up 1.5 percent,
outperforming the benchmark, which was down 0.16 percent.
($1 = 79.7800 Japanese yen)
(Reporting by Yuko Inoue; Editing by Daniel Magnowski and Ken