Daido Steel forecasts first half of 2020 (H1FY2021, April-September 2020) specialty steel sales volume to dip 52pc to an estimated 410,000mt, down 215,000mt from the prior year half. Much of Daido’s specialty steel segment sales are from the automobile sector.
The company expects the world economy to gradually recover from the COVID-19 pandemic from July onwards. Global automobile demand is expected to dip by 21-29pc in the calendar year 2020. Amid a significant decline in the sales orders from the auto sector, Daido Steel expects a 34pc drop in specialty steel’s sales volume in H1FY2021 compared to H2FY2020 (October-March 2020).
Daido’s steel specialty steel sales volume in the Q4FY2020 (March quarter) dropped by 30pc to 257,000mt, from 334,000mt in the prior year quarter. For the full year, Daido’s specialty steel sales volume was 1,176,000mt, down by 15pc from the prior year. Sales volume declined on weak demand from major consumer sectors such as automobiles, machinery, industrial and semiconductors.
Net sales of specialty Steel JPY181,674mn compared to JPY207,744mn in FY2019. The company’s consolidated net sales for FY2020 was JPY490,421mn down from 543,255 the prior year and net loss was JPY10,987mn, a contraction from JPY21,182mn in the prior year. Input cost such as prices of iron scrap remained low, but Daido’s sales and profits declined due to the slump in auto demand. The company expects a 6.6pc drop in ferrous scrap prices in the domestic market.
For H1FY2021, the company has forecast net sales at JPY180,000mn, down 28.7pc from the prior year half.