Reuters reported that Nippon Steel Corp aims to raise product prices and boost productivity by streamlining its manufacturing structure to help shore up faltering earnings. Nippon Steel EVP Mr Katsuhiro Miyamoto told Reuters in an interview “Steel demand is weakening this quarter, especially overseas and is expected to deteriorate later this year. Demand for flat steel used in automobiles and machinery is slowing in China, prompting fears of an increase in regional exports at a time when the broader Asian economy is stumbling due to the US China trade war. We are worried that flat products will gradually seep out from China to the rest of Asia. Our current priority to help improve earnings is to raise product prices as our margins have been squeezed for a long time.”
Softening global steel demand for automobiles and machinery amid a prolonged US China trade row and higher raw materials costs battered the latest round of quarterly earnings at Japan’s steelmakers, forcing many to cut their annual earnings forecasts. Nippon Steel forecast a 56% drop in business profit in the year through March 2020, as surging iron ore prices and slumping demand in Asia erode its margins.
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