(Corrects POSCO's results in last paragraph)
TOKYO, July 26 JFE Holdings Inc,
Japan's No.2 steelmaker, said on Friday it plans to boost its
crude steel output in the fiscal year to March 2014 to the
highest level in six years to meet strong demand for automobiles
and construction in Japan and for rising exports.
The bullish forecast comes as a sign that Prime Minister
Shinzo Abe's push to end two decades of economic stagnation with
a mix of monetary easing and fiscal expansion is bearing fruit.
"Steel demand for civil engineering, construction and
automobiles is on the rise. Overall, economic sentiment is
improving," JFE executive vice president Shinichi Okada told a
news conference. "In addition, our export competitiveness has
gained ground thanks to the weaker yen," he added.
Exports by Japanese steelmakers are recovering on the back
of the yen's fall against the U.S. dollar as a result of the
so-called "Abenomics" economic stimulus programme of hyper-easy
monetary policy, government spending and economic reform.
JFE forecast its crude steel output on a parent basis will
climb by 1 million tonnes, or four percent, from a year ago to
29 million tonnes in 2013/14, the highest since 2007/08,
pre-Lehman shock, when its output marked a record high of 30.5
The steelmaker also expects a rise in prices of its steel
products despite sluggish Asian markets hit by excess supply
from Chinese mills.
JFE forecast prices of its steel products to rise to 75,000
yen ($750) per tonne on average in the April-September period,
10 percent higher than 68,400 yen in the previous six months.
"Our product prices are expected to move higher in Japan as
we have been asking automakers and other manufacturers to
shoulder rising import costs of raw materials," Okada said.
Earlier this week, the Nikkei reported that Nippon Steel &
Sumitomo Metal Corp and Toyota Motor Corp have
agreed to raise steel-sheet prices by about 10 percent for
JFE, which ranks behind only Nippon Steel in Japan, reported
its recurring profit more than tripled to 35.2 billion yen in
the April-to-June quarter from 9.9 billion yen a year ago,
helped in large part by cost cuts and appraisal profit on its
It forecast 170 billion yen in recurring profit, pre-tax and
before one-off items, in the year to March 2014, more than
triple the 52 billion yen a year ago, although it is below a
consensus estimate of 221 billion in a poll of 17 analysts in
Thomson Reuters I/B/E/S.
On Thursday, South Korean steelmaker POSCO said
its operating profit dropped 36 percent to 703 billion won
($629.9 million) on a parent basis in the April to June quarter
from a year earlier.
($1 = 99.6200 Japanese yen)
($1 = 1,116.10 Korean won)
(Reporting by Yuka Obayashi)