Risks of Sluggish Steel Pipe Demand, a Downturn in Overseas Economies and Foreign Exchange Fluctuations

「Demand related to construction remains sluggish, while demand from the automotive sector has yet to make a full recovery. As a result, domestic demand for steel is expected to remain generally weak.」

「In the steel industry, persistently high costs, particularly in construction and manufacturing, led to moves to revise or cancel investment plans, and domestic demand remained sluggish. In addition, the inflow of low-priced overseas steel worsened domestic market conditions, and the difficult business environment continued.」

「In the steel-related businesses, demand in both the construction and manufacturing industries is expected to remain flat to weak, and the challenging business environment is likely to continue. Against the backdrop of soaring resource prices and foreign exchange fluctuations, raw material and auxiliary material costs continue to rise, prompting companies across the industry to move more aggressively to raise prices in order to secure profitability.」

「In the steel industry, domestic demand remained sluggish while domestic steelmakers continued to adjust inventories, and rising imports and falling prices weighed on market conditions. Demand fell sharply, particularly in construction, while demand in manufacturing also weakened. The industry as a whole remained in a difficult environment, and first-half crude steel production fell below the year-earlier level, reaching its lowest level since the COVID-19 pandemic began.」

「In the steel industry, inventory adjustments gradually progressed as domestic steelmakers continued to adjust supply, and some signs emerged that market conditions were bottoming out. However, prices remained soft amid the inflow of low-priced imports, while price revisions by major user companies and broadly weak market conditions also weighed on the market. Overall, weakness continued.」

「In the steel industry, demand related to automobiles showed signs of recovery but remained sluggish, partly due to the impact of shipment suspensions stemming from certification irregularities. In construction, demand stagnated because of labor shortages, while conditions also began to deteriorate in areas such as industrial machinery and construction machinery, which had previously been firm. Market conditions worsened across many sectors, with no recovery in demand in sight, and the difficult operating environment continued. In addition, concerns are growing that domestic steel prices could fall further as low-priced imports gain domestic market share.」

「In addition, global crude steel production has been trending higher on increased output from China and India, raising concerns about falling steel prices in overseas markets.」

「In the steel industry, some areas, such as automobile production and large-scale construction projects mainly in the Tokyo metropolitan area, remained firm. However, demand remained sluggish and did not achieve a full-scale recovery due to stagnant external demand, high resource prices and delays in construction schedules caused by chronic labor shortages.」

「In the steel industry, the automobile-related sector recovered gradually, but steel market conditions remained sluggish in the construction-related sector as demand reached a plateau due to labor shortages. Market prices also showed signs of weakening, and price competition for projects was observed in some areas.」

「In the steel industry, demand recovered in areas including automobile production, as supply constraints eased, and the start of redevelopment projects, particularly in the Tokyo metropolitan area. However, demand varied by sector, with resource and energy prices remaining high and demand for small and medium-sized projects weakening due to labor shortages. Overall, domestic steel demand remained sluggish.」

「In the steel industry, domestic demand for steel, which had remained firm, has begun to show signs of weakness due to soaring raw material and fuel prices, prolonged automobile production cuts, the slowdown in the Chinese economy and sluggish investment appetite resulting from higher steel material prices.」

「In the steel industry, domestic demand for steel materials generally showed signs of weakness due to soaring raw material and fuel prices, prolonged delays in the supply of components, particularly semiconductors for automobiles, the rapid depreciation of the yen and the prolonged situation in Ukraine.」

「In the steel industry, domestic and overseas economic conditions and demand for steel materials remained uncertain due to the prolonged delays in the supply of components, particularly semiconductors for automobiles, greenflation associated with decarbonization, soaring raw material and fuel prices, the rapid depreciation of the yen, and the prolonged situation in Ukraine.」

「Regarding the outlook, expectations for an economic recovery from the COVID-19 pandemic are growing, while concerns persist over the prolonged situation in Ukraine and cost increases driven by factors including the global shift toward decarbonization and the weaker yen. Raw material and steel prices are also expected to remain high.」

「During the nine-month period ended 31 December of the current fiscal year, Japan's economy showed signs of recovery as the difficult conditions gradually eased, including a sharp decline in the number of coronavirus cases.」

「No new business or other risks arose during the six months ended 30 September. There were also no material changes to the business and other risks described in the securities report for the previous fiscal year.」

「During the first quarter of the current fiscal year, Japan's economy remained subject to restrictions on economic activity, including the spread of coronavirus variants, and uncertainty about the economic outlook continued.」

「During the nine-month period ended 31 December of the current fiscal year, Japan's economy remained in a difficult situation as the novel coronavirus had a significant impact on global economic activity. Although the Chinese economy was on a recovery trend, the global economy remained unpredictable.」

「During the six-month period ended 30 September of the current fiscal year, Japan's economy remained in a difficult state as the global economy stagnated due to the novel coronavirus, although signs of a partial recovery emerged. Economic activity was gradually resuming as a result of government economic policies and other factors, but uncertainty about the outlook had not been dispelled.」

「During the first quarter of the current fiscal year, Japan's economy deteriorated as demand declined amid sluggish economic activity domestically while the global economy stagnated due to the impact of the novel coronavirus.」

「During the consolidated fiscal year under review, Japan's economy remained on a gradual recovery track as employment and income conditions improved. However, exports remained sluggish amid a slowdown in the global economy caused by factors including U.S.-China trade friction, and economic conditions showed signs of weakening amid the effects of typhoon damage and the decline in consumption following the consumption tax increase. In the second half of the fiscal year, the impact of the novel coronavirus disease compounded these factors, accelerating the deterioration in economic conditions.」

「During the nine-month period ended 31 December of the current fiscal year, Japan's economy remained on a gradual recovery track as employment and income conditions improved. However, exports remained sluggish amid a slowdown in the global economy caused by factors including U.S.-China trade friction, while the economic outlook remained uncertain due to the effects of typhoon damage and the decline in consumption following the consumption tax increase.」

「This represents disaster-related losses from damage to inventories and buildings at the Company's Chiba Plant caused by Typhoon No. 15 in September 2019. In addition, estimated restoration costs for damage to buildings at the Chiba Plant have been recorded as a provision for disaster losses to the extent that a reasonable estimate can currently be made.」

「During the first quarter of the current consolidated fiscal year, there were no newly arising business or other risks. In addition, there were no material changes to the business and other risks described in the annual securities report for the previous fiscal year.」

「This represents insurance proceeds received for damage to the Company's Kansai Plant and its consolidated subsidiary Stainless Pipe Industry Co., Ltd. caused by Typhoon No. 21 in September 2018. It also represents disaster-related losses from damage to inventories and buildings at the Company's Kansai Plant caused by the typhoon, as well as damage to buildings at the Company's consolidated subsidiary Stainless Pipe Industry Co., Ltd.」

「Buildings and inventories were damaged by Typhoon No. 21 in September 2018, and the resulting disaster-related losses were recorded as extraordinary losses. Profit attributable to owners of the parent for the quarter was ¥1,120 million, down 10.2% year on year.」

「The Company recorded ¥100 million in disaster-related losses as extraordinary losses, including damage to inventories at the Kansai Plant, which was affected by Typhoon No. 21 in September 2018.」

「During the first quarter of the current consolidated fiscal year, there were no newly arising business or other risks. In addition, there were no material changes to the business and other risks described in the annual securities report for the previous fiscal year.」

「Performance may be affected by the risk of higher costs associated with foreign exchange fluctuations, the risk of downturns in economic conditions in Japan and overseas, and reduced economic activity resulting from natural disasters and other events.」

「No new business or other risks arose during the cumulative third quarter under review. In addition, there have been no material changes to the business and other risks described in the annual securities report for the previous fiscal year.」

「During the first six months of the current consolidated fiscal year, there were no newly arising business or other risks. In addition, there were no material changes to the business and other risks described in the annual securities report for the previous fiscal year.」

「Although concerns remained about the effects of the normalization of U.S. monetary policy, uncertainty over the economic outlook for China and other emerging Asian economies, and fluctuations in financial markets, overseas economies remained on a recovery trend.」

「No new business or other risks arose during the cumulative third quarter under review. In addition, there have been no material changes to the business and other risks described in the annual securities report for the previous fiscal year.」

「During the first six months of the current consolidated fiscal year, there were no newly arising business or other risks. In addition, there were no material changes to the business and other risks described in the annual securities report for the previous fiscal year.」

「Overseas economies remained unstable, as economic conditions in China and other emerging Asian economies and resource-rich countries weakened, while concerns also persisted about the effects of heightened uncertainty in the global economy and fluctuations in the financial and capital markets.」

「There are also concerns, including the risk of a downturn in overseas economies such as those in Europe and China and rising costs due to foreign exchange fluctuations.」