TOKYO Jan 31 JFE Holdings Inc, Japan's
second largest steelmaker, will increase crude steel output by 1
million tonnes in the next business year after its third-quarter
recurring profit jumped nearly three-fold on strong domestic
Sales of construction and automotive steel has picked up in
Japan, helped by Prime Minister Shinzo Abe's push to end two
decades of economic stagnation with a mix of fiscal expansion
and monetary easing.
JFE's recurring profit, which is pretax and before one-off
items, rose to 50.33 billion yen ($490 million) in the Oct-Dec
quarter, from 18.78 billion yen in the same year-ago period, the
company said on Friday.
Its annual crude steel output to the year ending March 31 is
set to rise by about 4 percent year-on-year to around 29 million
tonnes, the highest level in six years.
JFE said it would increase its output further in the 2014/15
"Domestic demand is rising. We aim to produce 30 million
tonnes in crude steel next business year," JFE executive vice
president Shinichi Okada told a news conference.
"Construction and infrastructure demand will remain solid. A
sales tax hike may hurt automobile sales, but demand from
shipbuilders are recovering," he said.
Japan's overall crude steel output for the Oct-Dec quarter
rose 8.6 percent from a year earlier to 28.14 million tonnes,
driven by strong construction demand on the back of higher
government spending and a rush to build homes ahead of a sales
tax hike in April this year.
JFE, which exports about half of its steel products
overseas, remains cautious on exports due to a supply glut
brought on by China's massive crude steel output and weak global
demand. Weaker international steel prices have weighed on the
earnings of Asian steelmakers like South Korea's POSCO
"Oversupply in Asia will likely continue. Since market is
not expected to improve much, we won't boost our export," Okada
JFE, the world's ninth-biggest crude steel producer by
volume, kept its forecast of 170 billion yen in recurring profit
for the year to March 2014. The figure is lower than the 194.85
billion yen average of 16 analyst estimates, according to
Thomson Reuters Starmine.
Strong domestic demand also helped Japan's top steelmaker,
Nippon Steel & Sumitomo Metal Corp, report a nearly
nine-fold jump in recurring profit for the Oct-Dec quarter.
($1 = 102.7150 Japanese yen)
(Editing by Miral Fahmy)