Global fluctuations in the supply and demand for steelmaking raw materials

「原料炭、原油市況上昇等によるコスト増については、販売価格への転嫁を進める」

「In the steel business, revenue increased by ¥48.2 billion year on year to ¥1,585.6 billion, mainly due to efforts to improve selling prices and the foreign exchange impact of the weaker yen. Segment profit increased by ¥21.1 billion year on year to ¥15.8 billion, despite higher costs resulting from surging raw material prices and the impact of natural disasters, including torrential rain. The increase reflected ongoing improvements in selling prices, cost-reduction efforts and one-off factors such as gains from differences in inventory valuation.」

「The company will develop technologies for using lower-cost raw materials and seek to reduce procurement costs and cost volatility by increasing their usage ratio. It will also seek to reduce the risk of procurement disruptions by diversifying procurement sources and taking other measures.」

「原料炭： 豪州サイクロン影響で需給が急速にタイト化し一時FOB$250まで高騰したが、その後は供給が回復するにつれて下落。」

「The Company will seek to reduce the risk of procurement instability by acquiring part of the interest in the Blackwater coal mine owned by Whitehaven Coal in Australia and diversifying its procurement sources.」

「The Company expects that securing a stable supply of high-quality Blackwater coal through the acquisition of part of the mining interest will contribute to stabilizing profitability amid increasing volatility in coking coal market conditions.」

「If procurement of these raw materials and energy becomes difficult due to natural disasters or accidents in producing countries, international conflicts, supply chain disruptions or other factors, this may affect the Group's results through declines in production and sales volume.」

「Raw material prices have risen due to changes in global supply and demand, natural disasters and accidents in Australia and Brazil, the major producing countries, and international conflicts such as the one that occurred in Ukraine in 2022. If these increases cannot be passed through to steel prices, they may affect the Group's results.」

「Segment profit was ¥170 billion, down ¥82 billion from the year-earlier cumulative period, despite efforts to improve selling prices and achieve ongoing cost reductions. The decline reflected higher raw material prices, foreign exchange effects and one-off factors such as inventory valuation differences.」

「Segment profit decreased by ¥10.3 billion year on year to ¥148.2 billion, as higher raw material prices and cost increases caused by the rapid depreciation of the yen outweighed efforts to improve selling prices and reduce costs.」

「During the first quarter of the fiscal year, the Japanese and overseas economies generally continued to recover from the downturn caused by COVID-19. However, the prolonged situation in Ukraine and restrictions on economic activity in China affected production activity in some industries through soaring resource prices and supply constraints.」

「Conditions are expected to remain unpredictable due to the prolonged surge in prices of various commodities, including primary raw materials, and the uncertainty and other impacts that the increasingly tense situation in Ukraine may have on the global economy.」

「Segment profit improved by ¥353.9 billion year on year to ¥252.0 billion. Although soaring raw material prices increased costs, this was more than offset by improved selling prices, increased sales volume, recovery in the performance of group companies in Japan and overseas, and temporary profit-enhancing factors such as inventory valuation differences.」

「Segment profit improved by ¥294.7 billion year on year to ¥158.5 billion. Although higher raw material prices increased costs, this was more than offset by higher selling prices and sales volume, recovery in the performance of group companies in Japan and overseas, and temporary profit-enhancing factors such as inventory valuation differences.」

「Regarding profit and loss, although the Company worked to improve steel prices and profitability, costs increased substantially due to higher iron ore prices, materials and logistics costs, while deteriorating overseas market conditions and temporary profit-reducing factors such as inventory valuation differences also affected results. Segment profit was a loss of ¥8.7 billion.」

「Regarding profit and loss, although the Company worked to improve steel prices and profitability, costs increased substantially due to higher iron ore prices, materials and logistics costs, while deteriorating overseas market conditions and temporary profit-reducing factors such as inventory valuation differences also affected results. Segment profit was ¥11.3 billion, down ¥151.9 billion from the same period of the previous year.」

「Regarding profit and loss, although the Company worked to improve steel prices and profitability, costs increased substantially due to higher prices for primary raw materials, materials and logistics, while deteriorating overseas market conditions and temporary profit-reducing factors such as inventory valuation differences also affected results. Segment profit was ¥17.7 billion, down ¥99.6 billion from the same period of the previous year.」

「Regarding profit and loss, although the Company worked to improve steel prices and profitability, costs increased substantially due to higher prices for primary raw materials, materials and logistics, while temporary profit-reducing factors such as inventory valuation differences also affected results. Segment profit was ¥14.5 billion, down ¥49.6 billion from the same period of the previous year.」

「Regarding profit and loss, despite the substantial increase in costs due to higher prices for auxiliary raw materials such as metals, materials costs and logistics costs, as well as the impact of operating disruptions and natural disasters such as torrential rains, efforts to improve steel prices and profitability resulted in ordinary profit of ¥157.0 billion, an increase of ¥6.8 billion from the same period of the previous year.」

「Regarding profit and loss, although costs increased substantially due to higher prices for auxiliary raw materials such as metals, materials costs and logistics costs, efforts to improve steel prices and profitability resulted in ordinary profit of ¥114.1 billion, an increase of ¥29.5 billion from the same period of the previous year.」

「Regarding profit and loss, although costs increased substantially due to higher prices for auxiliary raw materials such as metals, materials costs and logistics costs, efforts to improve steel prices and profitability resulted in ordinary profit of ¥64.4 billion, an increase of ¥15.8 billion from the same period of the previous year.」

「Costs increased substantially due to the surge in coking coal prices from autumn 2016 onward, as well as higher prices for auxiliary raw materials such as metals, materials costs and logistics costs.」

「Manufacturing costs increased substantially due to soaring raw material prices, particularly coking coal, from autumn 2016 onward.」

「The business environment surrounding the steel business remains extremely challenging. In Japan, demand related to the Tokyo Olympic and Paralympic Games and other projects is expected over the next several years, but a substantial increase in demand for steel products cannot be expected over the longer term due to declining domestic demand associated with the declining birthrate and aging population. In addition, excess steel production, centered on China, continues worldwide.」

「Prices of raw materials, particularly coking coal, soared and became a major factor driving up costs. Against this backdrop, efforts to improve steel prices resulted in revenue of ¥636.4 billion, an increase of ¥108.0 billion, or 20.4%, year on year. Regarding profit and loss, although steel price improvements did not keep pace with the increase in raw material prices, ongoing efforts to improve profitability, together with temporary profit-enhancing factors such as inventory valuation differences, resulted in ordinary profit of ¥48.6 billion, an improvement of ¥68.9 billion from the same period of the previous year.」

「Although the Company continued efforts to improve profitability, the sharp and substantial increase in coking coal prices from autumn 2016 onward had a significant impact, and conditions remained challenging in substance.」

「Coking coal prices in particular have been rising. Against this backdrop, revenue decreased by ¥194.4 billion, or 10.5%, year on year to ¥1,655.5 billion. Regarding profit and loss, despite ongoing efforts to improve profitability and profit-enhancing factors such as inventory valuation differences, the deterioration in sales conditions and soaring coking coal prices resulted in ordinary profit of ¥13.6 billion, down ¥27.2 billion year on year.」

「The business environment surrounding the JFE Group remains challenging. In Japan, firm demand is expected due to measures such as national resilience policies and preparations for the Olympic and Paralympic Games, while overseas, demand is expected to grow for social infrastructure development and energy-saving and environmental initiatives. However, the global supply-demand gap is widening as emerging-market economies slow, resource prices remain weak, exchange rates are fluctuating sharply, and geopolitical risks persist in some regions.」

「Due to inventory valuation differences resulting from deteriorating sales conditions and falling raw material prices, as well as the impact of foreign exchange fluctuations, the Company recorded an ordinary loss of ¥20.3 billion, a deterioration of ¥41.8 billion from the same period of the previous year.」

「The Group procures iron ore, coking coal, ferroalloys, non-ferrous metals, scrap and other materials as raw materials for steel products. Accordingly, global supply and demand conditions for these materials affect results.」