Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Japan’s leading electric arc steelmaker, Tokyo Steel’s crude steel production in H1 (April-Sep) dropped by 238,000mt or 18.3pc to 1.61mn mt from the prior year. The steel production declined by 18.9pc to 1.01mn mt, down by 235,000mt.



In H2 FY2021, the company plans to offer a total of 1mn mt of steel products, down by 52,000mt from H1. The company expects the metal spread to be JPY39,000/mt, down by JPY1,900/mt, assuming the average unit sales price for steel products at JPY66,500/mt, up JPY3,100 from H1 and purchasing price for ferrous scrap at JPY27,500/mt, up JPY5,000/mt.  


For the full year ending March 2021, Tokyo Steel estimates sales at around JPY134bn, down 25.5pc from the previous fiscal due to plant closure amid COVID-19. Operating profit is forecast at JPY5.3bn, down 69.5pc; while net profit is estimated at JPY4.8bn, down 65.2pc. Tokyo Steel has kept sales projections unchanged from the prior year but has lowered net profit by JPY700mn.


The company plans to sell over 2.05mn mt of steel products in FY2021. Steel product sales and ferrous scrap purchase prices are expected to average at JPY64,900/mt and JPY25,200/mt, respectively in H2. The average price for steel products sales declined to JPY63,400/mt, down by JPY12,600/mt from the prior year period, according to the company’s release.  


On the other side, the average purchase price of ferrous scraps declined to JPY22,500/mt delivered mill, down by just JPY7,500/mt. This has impacted the company’s profit margins. Spread dropped to JPY40,900/mt, down JPY5100/mt.  



In H1, the steelmaker made JPY67.358bn in sales, down by 29.8pc from the prior year period. Operating profit was JPY3.26bn, down by 57.8pc, while net profit was JPY3.323bn, down by 54.6pc.  


Steel product sales totalled 1.052mn mt, down by 186,000mt or 15.0pc from a year prior. Sales of shapes, bars, sheets and steel plates accounted for 47pc, 4pc, 42pc and 7pc, respectively.  


In the Q2 (July-Sep), the sales totalled 490,000mt, down by 10,000mt from Q1. The average price for ferrous scrap purchase was JPY24,700/mt while steel product sales price was at JPY63,100/mt, down JPY1,900/mt from the prior quarter.




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