Japan's biggest steelmakers Nippon Steel and JFE Holdings have reported weaker earnings for the fiscal first quarter due to the negative impact of the March disasters on domestic demand. JFE saw net profit tumble 75% YoY to JPY 7.12 billion for the quarter.
Nippon Steel, Japan's largest steel maker by volume, generated a net profit of JPY 29.09 billion in the period, 8.4% higher than the same time a year earlier, but the gain was attributed to a lower tax burden. The recent quarter saw steel demand in Japan weaken as manufacturers such as automakers cut output following the March 11th 2011 earthquake and tsunami amid parts and power shortages.
Nippon Steel was downgraded by both Moody's and Standard & Poor's in June amid concerns over its profitability in the face of rising commodity prices. The Tokyo based company produces high quality steel for use in a variety of sectors globally, with the auto industry a key customer.
In February 2011, Nippon Steel and third ranked rival Sumitomo Metal Industries said they would work towards a merger that would create the world’s second largest steel firm by 2012.
( Source: www.steelguru.com )