Mitsubishi Materials Corporation reported its results for the first quarter of the current fiscal year, with ordinary income revised sharply upward and net sales and net income also exceeding expectations. The share price surged on improved tungsten price spreads, while inventory normalization and the risk of a reversal warrant attention.
In its results for the first quarter of the current fiscal year ending March 2027, Mitsubishi Materials Corporation substantially raised its net sales forecast from the previous fiscal year and revised its ordinary income outlook to a significant year-on-year increase. Under the new plan, net sales are projected at ¥2.4 trillion, ordinary income at ¥180 billion and net income at ¥140 billion, while ROE is expected to reach 18.5%, well above the previous target. The share price surged following the results.
The primary reason for the upward revision was the widening spread between raw material and selling prices in tungsten. APT, an intermediate tungsten product, has surged to approximately 7.5 times its level a year earlier. Price increases implemented from June 2026 have helped absorb the raw material price spread, substantially improving profitability. As a result, the full-year ordinary income forecast was raised significantly.
The improvement in performance this fiscal year reflects not only inventory factors but also higher sales volumes of the company’s products and more appropriate pricing amid a recovery in external demand. However, the use of low-cost inventory is expected to wind down, and it is uncertain whether tungsten market prices will remain elevated. Recycling procurement and the company’s integrated production structure are expected to provide support, but the risk of a reversal requires attention.
To support future growth, the company is pursuing a plan to double its APT production capacity, while increasing its recycling ratio and strengthening its in-house refining capabilities. In September 2026, it announced plans to enhance recycling capacity and is targeting full-scale operation in April 2029. The company’s competitive advantage in its product businesses and its ability to contain material costs are expected to be key to its long-term competitiveness.