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Business Times
07-08-2025
- Automotive
- Business Times
Japan's steel output may sink to lowest since 1968 as US tariff risks loom
[TOKYO] Kobe Steel, Japan's No 3 steelmaker, on Thursday (Aug 7) reported a 3 per cent fall in quarterly crude steel output due to lower prices and the potential impact of US tariffs on car production, similar to declines at Nippon Steel and JFE Holdings. With the US tariff risk looming, Japan's Iron and Steel Federation has warned domestic crude steel output could fall below 80 million tonnes this year versus 84 million tonnes a year ago. That would be the lowest since the 67 million tonnes produced in 1968, the Federation said. The latest pressure comes as Japan's top tariff negotiator Ryosei Akazawa pressed the US to swiftly implement an agreed cut to auto tariffs during a meeting this week with US Secretary of Commerce Howard Lutnick in Washington. Japan is also grappling with a surge in cheap steel exports from top producer China, which is dragging down prices and prompting countries, including Japan, to consider protective trade measures. Japanese car sales to the US are already falling as automakers shift production to the US, Mexico and Canada to reduce costs. For the April-to-June quarter, Kobe Steel's crude steel output slid 3 per cent to 1.46 million tonnes on weaker domestic consumption in the construction and auto sectors. Nippon Steel's output fell by 7 per cent to 9.46 million tonnes and JFE dropped by 3 per cent to 5.61 million tons. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up 'The downward trend in domestic steel demand will continue due to population decline, decrease in exports of finished auto to the US and indirect exports by other manufacturing industries,' Nippon Steel said on Friday. Nippon Steel expects a 50 billion yen hit to its annual profits from the US tariffs, while Kobe Steel sees a five billion yen impact. JFE plans to close several domestic facilities to reduce capacity. 'US tariff measures pose the greatest risk, particularly with regard to trends and impacts in the automotive and construction machinery sectors,' JFE said in its earnings presentation on Monday. To offset domestic weakness, Nippon Steel and JFE are focusing on overseas expansion. Nippon Steel bought US Steel for US$15 billion, pledging close to a similar amount in investments into the newly acquired assets, betting on US demand growth. JFE, together with a partner, announced a 120 billion yen investment to expand facilities in India, the biggest driver of the global steel demand, backed by heavy infrastructure spending. 'Looking at the world, the only attractive markets for the steel industry are India and the US,' said Ryunosuke Shibata, analyst at SBI Securities. 'Even if Asian countries have the potential to expand demand, there is a risk as China is close.' To survive, 'there is no choice but to expand business in growing overseas markets,' Shibata said. REUTERS
Time of India
04-08-2025
- Business
- Time of India
JSW Steel, Japan's JFE to invest $669 million to boost electrical steel output
Advt A joint venture between India's JSW Steel and Japan's JFE Steel will invest ₹5,845 crore to expand production capacity of cold rolled grain-oriented electrical steel across two Indian plants to meet growing domestic demand, JSW Steel said on and JFE will equally fund a combined ₹1,966 crore for the expansion through equity, JSW Steel said. The added capacity will be commissioned in phases from fiscal year 2028. The company did the specify the source of rest of the rolled grain-oriented electrical steel is mainly used in energy applications, and is considered to be more energy efficient, reducing carbon JFE Electrical Steel will raise production of the steel at its Nashik plant to 250,000 tons per annum from the current 50,000 TPA, for which the two companies plan to invest ₹4,300 companies will invest the remaining 15.45 billion rupees to augment capacity of an upcoming facility in Vijayanagar to 100,000 TPA from an originally planned 62,000 TPA, JSW Steel said in an exchange JFE's Nashik plant was bought in January from Germany's Thyssenkrupp in a ₹4,159 crore deal.
Yahoo
02-06-2025
- Business
- Yahoo
Analysts assess the potential impact of Trump's surprise 50% steel tariffs
-- U.S. President Donald Trump unexpectedly announced on Friday that steel and aluminum tariffs will double to 50%. The move, set to come into effect on June 4, was unveiled during a campaign rally in Pennsylvania. It was later confirmed on TruthSocial and comes amid broader debates around U.S. industrial policy and foreign investment. Analysts are now evaluating the implications of this surprise decision, with most agreeing that the immediate domestic effects may be less severe than the broader geopolitical risks. JPMorgan's Tatsuya Maruyama said the direct impact on major Japanese steelmakers such as Nippon Steel Corp (TYO:5401), JFE Holdings, Inc. (TYO:5411), and Kobe Steel, Ltd. (TYO:5406) is expected to be limited, given that 'the U.S. accounts for about 4% of Japan's steel exports.' Maruyama pointed out in a Monday note that Nippon Steel and JFE export only about 1% of their total shipments to the U.S., while Kobe Steel exports about 3%. Still, he warned that 'rising global protectionism' is a growing concern, noting that a wave of anti-dumping measures and safeguards in regions like South Korea, the EU, and India could further strain global trade dynamics. 'If such countermeasures gain momentum, Japanese steel products may also be targeted and the export environment may worsen,' Maruyama continued. Meanwhile, analysts at BMO Capital Markets believe the sudden tariff hike could jolt domestic markets. 'The doubling of import tariffs, if maintained, is likely to create a panic in the market and trigger a restocking cycle that in our view has the potential to push prices >$1,000/st in the near-term,' the analysts said. However, they believe the spike would be temporary given macro uncertainty and seasonal demand trends. The broker upgraded Nucor (NYSE:NUE) to Outperform but downgraded Algoma Central (TSX:ALC), which it called 'a relative tariff loser.' The aluminum market may be more exposed, according to BMO. The U.S. covers only about 20% of its own aluminum consumption domestically, making it more vulnerable to supply disruptions. 'If tariffs do double, this is expected to put material upside pressure on the Midwest premium (MWP),' BMO wrote, estimating it could reach '$0.75/lb-plus' in theory, although higher aluminum cost will likely weigh on demand and thus offset some upside pressure. That said, the brokerage sees Century Aluminum (NASDAQ:CENX) as well positioned to benefit from a rise in the Midwest premium, while Alcoa (NYSE:AA) could see a negative impact of $1–2 per share, or 4–7%, due to its reliance on Canadian production. Still, BMO expects Alcoa may redirect some of its Canadian output to the EU market. Related articles Analysts assess the potential impact of Trump's surprise 50% steel tariffs Street Calls of the Week VIDEO: How to analyze a stock like a pro with the CEO of HF Foods
