The world's second biggest steelmaker Japan-based Nippon Steel & Sumitomo Metal Corp. (NSSMC) has announced its financial results for the financial year 2015-16, ended March 31, posting a net profit of JPY 145.42 billion ($1.34 billion), declining by 32.1 percent year on year. In the given period, the company's net sales amounted to JPY 4.9 trillion ($45.12 billion), compared to the net sales of JPY 5.61 trillion in the previous financial year.
During the given year, NSSMC's steelmaking and steel fabrication segment recorded net sales of JPY 4.28 trillion ($39.4 billion), decreasing by 13.3 percent year on year. NSSMC stated that in Japan it decided to expand the coke oven facilities of the Kashima Works with the aims of increasing production capacity and enhancing cost competitiveness. In addition, NSSMC decided to optimize the iron-making production structure at the Yawata Works, which comprises the Yawata, Tobata, and Kokura areas.
Meanwhile, in the given financial year, NSSMC produced 44.53 million mt of crude steel, down 5.89 percent, while the company's steel product shipments amounted to 39.62 million mt, decreasing by 5.32 percent, both year on year.
NSSMC said that domestic steel demand is expected to decline in the first half of the fiscal year 2016-17 due to seasonal factors. Demand is then likely to recover in the second half, driven by factors such as a pick-up in automobile production and increased investment associated with the upcoming Olympics in 2020, on top of a seasonal rise in public works projects. The company anticipates overseas steel demand remaining essentially flat overall. Although it expects a modest increase in demand in the ASEAN region, the Chinese slowdown is expected to persist and the stagnant crude oil market will likely lead to depressed demand for the energy sector. NSSMC also stated that, while some signs of recovery are being seen in the international market, the situation needs to be monitored owing to the persistent excessive supply of steel products in China and elsewhere in East Asia.