Dive Brief:
- Nippon Steel, Japan’s biggest steelmaker, posted a net profit of 17.2 billion yen ($109 million) for its fiscal year that ended March 31, 2026.
- That was down 95% from a year ago as the company navigated weak market conditions and one-off losses following the U.S. Steel acquisition last summer.
- Revenue was 10 trillion yen ($63.4 billion) during the period, up 15.7% from a year ago. The growth came mostly from its steelmaking and steel fabrication division as Nippon Steel advanced its expansion and production strategies in the United States, Europe, India and Thailand.
Dive Insight:
Several issues weighed on Nippon Steel during the year, including an extended suspension of operations at its Muroran Works location in Hokkaido, Japan, following a December fire reported by Argus Media. No injuries were reported at the time. The plant had just resumed normal operations in late November following repairs from a slag leak in September.
In total, the Hokkaido disruptions reduced Nippon Steel’s underlying business profit by 50 billion yen ($316.9 million) for the year. The company also faced global steel market “deterioration” beyond initial expectations, driven in part by a flood of low-priced steel exports from China, according to its latest earnings presentation. Meanwhile, Nippon Steel is investing heavily in the U.S. for long-term growth.
“The U.S. steel market is overwhelmingly large globally,” with a current estimated demand of 150 million tons and potential for future market growth, Tadashi Imai, representative director, president and COO of Nippon Steel, said in a statement Wednesday.
The acquisition of U.S. Steel, which closed in June, totaled $14.9 billion and included a commitment of more than $11 billion in new U.S. investments by Nippon Steel, as well as a “golden share” for the U.S. government, which would give it a say in certain matters.
Despite an underlying business loss of 5.6 billion yen ($35.5 million) for the year, U.S. Steel is expected to eventually be a profit driver for Nippon Steel. Nippon Steel said U.S. demand is stable as steel exports and imports decline.
U.S. Steel has a number of projects underway, including the relining of a blast furnace and a hot strip mill upgrade at Gary Works, as well as the installation of a new slag recycler at Mon Valley Works and a new premium thread line at Fairfield Works.
The company last month announced plans to invest $1.9 billion in a direct reduced iron plant at its Big River Works location in Osceola, Arkansas. The project is set for completion in the first quarter of 2029.
Current and upcoming U.S. Steel investments are “necessary and effective” for enhancing the subsidiary’s corporate value, Imai said. As part of its acquisition strategy, Nippon Steel has begun to enhance U.S. Steel’s manufacturing capabilities with its own techniques and bring new products to market.
“There are no issues with their profitability,” Imai said about U.S. Steel.
Looking ahead, Nippon Steel said it expects a business profit of 700 billion yen ($4.4 billion) for fiscal year 2026, excluding impacts from the Middle East. Disruptions from the U.S.-Iran war cannot be “comprehensively and reasonably assessed at this time,” but the company noted that the Middle East has become an important export market.
U.S. Steel will contribute more than 100 billion yen during the period, according to the earnings presentation. The Japan-based steelmaker reported a business profit of 514.1 billion yen ($3.3 billion) during fiscal year 2025.
