Japan: Tokyo Steel records significant increase in steel sales in Apr-Jun’22 quarter

Japan’s leading EAF steel producer, Tokyo Steel, has recorded its second highest quarterly steel sales of JPY 90,651 million in the April-June, 2022 quarter, a significant increase of 70.8% against the corresponding period last year.

Sales up

In April-June, 2022, steel sales rose by 156,000 t y-o-y to 789,000 tonnes (t), in which exports share fell to 21.6%.

Out of the total increase in sales, domestic sales jumped by 150,000 t while exports sales were at 6,000 t.

Financial highlights

The company’s operating profit stood at JPY 7,233 million, up 94.7%, while ordinary profit totalled to JPY 7,895 million, up 94.5% and net profit rose 87.4% to JPY 6,809 million during the period.

The rate of increase in the selling price was exceeded against the amount of scrap, which is the prime raw material, thus, the metal spread widened.

Prices

• The unit sales price of steel products from April to June was JPY 113,300/t ($830/t) , an increase of JPY 31,800 ($233) from the same period of the previous year.
• The unit price of iron scrap was JPY 63,000/t ($462/t), an increase of JPY 16,400/t ($120/t).
• The metal spread, which is the difference between the selling price and the price of raw materials, was JPY 50,300/t ($369/t), an increase of JPY 15,400/t ($113/t).

“Raw material prices were slightly lower than expected, but they were almost as expected, including the penetration of sales price increases. Overall, it is a good start,” Yuji Komatsuzaki, Managing Executive Officer and General Manager of Sales Division said on the company’s April-June quarter results.

Profit and sales forecast

Tokyo Steel revised its full year profit forecast upward to JPY 40 billion for April-September 2022. Profit is likely to increase instead of decline. Iron scrap prices have been lowered which will help in reducing the cost of production.

Sales volumes were lower than expected in April-June. However, revised sales for April-September are targeted at JPY 183.3 billion (previous forecast: JPY 189 billion), operating income is JPY 23 billion (JPY 14 billion), ordinary income is JPY 23.5 billion (JPY 14.5 billion), and net income is JPY 20.5 billion.

Note: The article has been published in line with an article exchange agreement with Japan Metal Daily.