Global demand for steel has still remained strong

Tag : Metal Cast
Third-ranked JFE Holdings Inc said its April-June pretax recurringprofit fell 23 percent, and it forecast 450 billion yen ($4.2billion) profit for the year to March 2009. JFE had previouslydeclined to forecast full-year profit as price talks with clientshad stalled.
Substantial delays in negotiations with carmakers and shipbuilderson six-month and annual contract prices battered Japanesesteelmakers' April-June results as prices stayed low while the costof iron ore nearly doubled and coal trebled.
Industry experts expect steelmakers to raise prices by nearly 40percent this business year and increase profit targets again inSeptember as they pass on most of the high raw material costs.
"There is a chance we will see another upward revision," saidShinya Yamada, an analyst at Credit Suisse. "I don't think theyhave fully factored in the impact of price hikes."
Global demand for steel has remained strong so far this year,boosting prices, despite soft economic growth and turmoil infinancial markets. The weak U.S. housing sector has not affecteddemand, since that market is not a major steel purchaser.
This week, top-ranked ArcelorMittal posted record quarterly netprofit of $5.84 billion, way above analyst expectations, afterpassing on rising raw materials costs, and U.S. Steel (nyse: X - news - people ) Corp also beat forecasts on surging prices.
South Korea's POSCO (nyse: PKX - news - people ) ranked fourth in the world, this month beat forecasts withrecord quarterly net profit, and increased its earnings targets toreflect a sharp rise in its benchmark steel prices.
Nippon Steel, a major beneficiary of strong worldwide sales byJapanese carmakers such as Toyota Motor Corp (nyse: TM - news - people ) booked 144.1 billion yen ($1.3 billion) in April-June recurringprofit, which is pretax and before special items.
It raised its profit forecast for the year to March 2009 to 450billion yen from the 370 billion yen outlook announced three monthsago. That was still short of an average 509.48 billion yen estimategiven in a poll of 11 analysts in Reuters Estimates.
Shares in Nippon Steel climbed 14 percent in April-June, in linewith Tokyo's steel sub-sector index ISTEL.while JFE gained 21percent.
Sumitomo Metal Industries on Thursday also hiked its recurringprofit forecast for the full year. It now sees a 250 billionprofit, up 19 percent from its previous forecast, after posting a1.1 percent fall in its quarterly profit.
Tata Steel the world's sixth-biggest producer, posts quarterlyearnings later on Thursday. (Editing by Ian Geoghegan) Copyright 2008 Reuters,