Risk of fluctuations in the prices of raw materials such as iron ore and coal

「下期は、販売数量が上期の水準を上回る見通し。一方、足元コスト上昇が進んでおり、売価転嫁に向けた交渉を進めているが、期ズレとなる可能性がある。」

「For some customers, the Group has established formulas linking selling prices to costs. It is also working to reduce the impact of price fluctuations by continuously monitoring market trends, securing multiple suppliers, reviewing procurement terms, pursuing cost reductions, and negotiating price revisions with customers.」

「In terms of procurement costs, although raw material markets declined, imported raw material costs remained high due to the impact of the weaker yen. Other costs, including energy, logistics and labour costs, also remained elevated.」

「Operating profit in the specialty steel materials business was ¥204 million, down ¥269 million, or 56.9%, year on year. Although the overseas business in Indonesia recorded higher profit due to the decline in scrap prices and other factors, profit declined because of lower sales volume in the domestic business and the resulting deterioration in productivity and material usage, the failure of selling prices to keep pace with the rise in imported raw material prices caused by the weaker yen, and the disappearance of the profit contribution from using low-cost raw material inventories acquired before the sharp price increases in the same period of the previous year.」

「In terms of procurement costs, although raw material markets had stabilised, coking coal prices have recently begun rising again. In addition, the weaker yen has increased the import cost of raw materials, while energy prices remain high.」

「Although the iron ore and coking coal markets are trending lower, the yen has again been weakening, pushing up the prices of imported raw materials. Energy prices also remain elevated.」

「Although the iron ore and coking coal markets, which had been surging, have recently shown some stability compared with an earlier period, and the rapid depreciation of the yen seen last year is also showing signs of easing, procurement costs remain high compared with the same period of the previous year. In addition, energy prices remain elevated.」

「Although the iron ore and coking coal markets, which had been surging, have recently shown some stability compared with an earlier period, and the rapid depreciation of the yen seen last year is also showing signs of easing, procurement costs remain high compared with the same period of the previous year. In addition, energy prices remain elevated.」

「Although the iron ore and coking coal markets have recently stabilised, procurement costs have risen due to the rapid depreciation of the yen and higher imported raw-material prices, as well as surging energy prices. Passing further cost increases on to selling prices has become a major challenge.」

「Procurement costs have risen due to surging raw-material and energy prices as well as the rapid depreciation of the yen, making it a major challenge to pass further cost increases on to selling prices.」

「Both the domestic and overseas businesses were affected by the negative factor of a time lag in reflecting higher raw-material prices in selling prices, although」

「Although the time lag in reflecting higher raw-material prices in selling prices remains a negative factor both domestically and overseas, the domestic business recorded a substantial increase in profit due to the elimination of one-off costs associated with last year's blast-furnace refurbishment, as well as cost improvements from higher sales volumes and the resulting increase in production.」

「Prices of iron ore and coking coal, the principal raw materials for the Company's special steel products, have risen substantially, and ferroalloy and other costs are also trending higher. The Group has been working to reflect surging raw-material prices in selling prices, but further increases in principal raw-material prices are expected this fiscal year, making it a critical issue to reflect the resulting cost increases in selling prices.」

「Operating loss amounted to ¥4,283 million, a year-on-year deterioration of ¥4,689 million. This reflected the impact of lower sales, higher one-off costs from drawing down stockpiled inventory in connection with blast-furnace refurbishment in the Special Steel Products segment, and, from the second half, the burden of refurbishment costs. These factors outweighed fixed-cost reductions, improvements at overseas locations and lower depreciation charges following the impairment loss recognised at an overseas subsidiary in the second quarter of the previous consolidated fiscal year.」

「In the Special Steel Products segment, the domestic business recorded lower profit, primarily due to lower sales volumes and higher costs associated with blast-furnace refurbishment. Although the use of stockpiled inventory ahead of the refurbishment produced cost savings, profit still declined.」

「In FY2020, Hokai Steel Co., Ltd., an affiliated company supplying raw materials to the Special Steel Products segment, planned to suspend operations for blast-furnace refurbishment, and raw-material prices were expected to rise.」

「Operating profit amounted to ¥859 million, down ¥228 million (21.0%) year on year. In the domestic business, the benefits of selling-price improvements and higher production associated with inventory accumulation ahead of next year's blast-furnace refurbishment were more than offset by a significant decline in sales volumes. In the overseas business, costs increased due to higher auxiliary-material prices and production problems at a steelmaking plant.」

「Operating profit amounted to ¥382 million, down ¥26 million (6.6%) year on year, as lower volumes and higher auxiliary-material costs outweighed the effects of ongoing selling-price improvements.」

「At the North American subsidiary, production disruptions occurred from the first half of the current fiscal year as the impact of additional tariffs arising from steel import restrictions in the United States and Canada and higher material costs due to rising market prices was compounded by tight material procurement caused by those higher market prices.」

「In the special-steel materials business, profit fell by ¥887 million, or 52.3%, year on year to ¥808 million, due to higher costs resulting from increases in raw fuel and auxiliary-material prices, among other factors, and losses at JATIM.」

「Operating profit amounted to ¥1,613 million, up ¥346 million (27.3%) from the previous fiscal year, but remained limited, as the significant impact of higher costs due to rising prices for principal raw materials, ferroalloys and auxiliary materials outweighed the benefit of higher sales.」

「Operating profit amounted to ¥2,425 million, up ¥11 million (0.5%) year on year, but remained largely unchanged, as lower profit in the Molded Products and Equipment and Machinery segments was compounded by the significant impact of persistently high prices for principal raw materials and higher prices for ferroalloys and auxiliary materials in the Special Steel Products segment.」

「In the Special Steel Products segment, demand recovered both domestically and for exports, and the Company implemented pricing measures to reflect higher raw-material prices. Net sales amounted to ¥25,713 million, up ¥7,423 million (40.6%) year on year. Although pricing measures did not fully offset the increase in costs due to higher raw-material prices, operating profit rose by ¥665 million (150.3%) to ¥1,108 million on higher sales.」

「In the Special Steel Products segment, demand, mainly for construction machinery, recovered, and the Company implemented pricing measures in response to the raw-material price increases in the second half of the previous fiscal year. Net sales amounted to ¥13,131 million, up ¥4,205 million (47.1%) year on year. Although costs increased due to higher raw-material prices, operating profit rose by ¥425 million (135.9%) to ¥738 million, driven by pricing measures and higher sales.」

「In the Special Steel Products segment, operating profit amounted to ¥1,267 million, up ¥148 million (13.3%) from the previous fiscal year, despite the impact of surging raw-material prices, due to higher sales volumes to the construction machinery sector and other factors.」

「In the Special Steel Products segment, although demand for construction machinery showed signs of recovery amid a surge in coking coal prices, the effects of pricing measures taken in response to the earlier decline in raw-material prices remained. Net sales amounted to ¥28,540 million, down ¥2,237 million (7.3%) year on year. Operating profit amounted to ¥913 million, up ¥127 million (16.3%), due to higher sales to the construction machinery sector and cost reductions.」

「In the Special Steel Products segment, coking coal prices have surged, and the Company will work to achieve further improvements in costs and selling prices.」

「In the Spring segment, although the Company pursued sales growth in Asia, net sales amounted to ¥11,010 million, down ¥1,365 million (11.0%) year on year, due to lower commercial-vehicle exports and foreign-exchange effects in North America. Operating profit amounted to ¥134 million, down ¥200 million (59.9%), as the effects of lower sales and higher material prices in North America more than offset the benefits of cost improvements at overseas locations.」

「The Company uses iron ore, coal, scrap and ferroalloys as its principal raw materials, and fluctuations in their market prices may affect its performance.」