Asian key steelmakers to show earning report for Q1
Asian major steel companies are likely to show their Q1 was their low point but no positive signal for short term as China continues to ramp up output amid slowing demand, Reuters reported.
Some analysts indicated that debt crisis in the euro zone and tight credit conditions in China has depressed steel demand and has squeezed margins despite falls in raw material costs.
The most profitable steelmaker Posco describes its Q1 performance as the most difficult earnings period and the company’s profit is likely to cut in half.
In China, the steel industry could have RMB$ 1 billion of losses in the Q1; the profit at the same period last year was RMB$25.8 billion, according to an official of China Iron & Steel Association.
The price improvements in China were small in March and April which is unusual for pick up season after winter stop.
Earnings at Japanese mills are seen plunging to their worst levels since Lehman crisis. The weak steel market in Asia caused ill for Nippon Steel and JFE Steel, but the yen’s easing to 80 against US dollars from 75.7 record high and bounce back of domestic auto market may made small improvement in their results compared to their own forecasts.
India is the small bright spot among all key steelmakers in Asia, where easing raw materials costs and interest rates cut this week could boost margins in coming quarters although demand uncertainty.
SAIL and JSW may see improvement in margins, but Tata Steel would face a two-thirds fall in the Q1 due to weak prices and demand at European unit Corus, which account for most of its global capacity of 28 million tons.
News Date 19 Apr 2012 14:38:11 reported by Raul Lee