Nippon Steel expects the ongoing Middle East situation to reduce its steel export volumes to the region and raise logistics and raw material costs in fiscal 2026, according to the Japanese steelmaker’s latest earnings presentation.
The company estimated the overall Middle East-related impact on its underlying business profit at around JPY 60 bln (USD 380 mln) for the fiscal year, including approximately JPY 25 bln (USD 158 mln) already recorded in the first quarter.
Nippon Steel cited lower steel exports to the Middle East among the factors affecting its domestic steel business, alongside higher crude oil and natural gas prices, which have pushed up logistics and energy costs. Scrap, coking coal and other raw material prices have also increased. The company said these external pressures, including the Middle East impact, are increasingly affecting its domestic operations.
The steelmaker expects its domestic operations to generate underlying business profit of JPY 380 bln (USD 2.4 bln) in FY2026, down JPY 90 bln (USD 570 mln) from its previous forecast. This is being offset by a stronger overseas outlook, with overseas underlying business profit now forecast at JPY 320 bln (USD 2.03 bln), up JPY 90 bln (USD 570 mln) from the earlier projection.
In the first quarter of FY2026, Nippon Steel posted revenue of JPY 2.8211 trillion (USD 17.86 bln), while underlying consolidated business profit amounted to JPY 108.4 bln (USD 686 mln). Consolidated business profit was JPY 145.5 bln (USD 921 mln), with a return on sales of 5.2pct, while net profit attributable to owners of the parent reached JPY 75.2 bln (USD 476 mln).
Overseas operations contributed JPY 61.3 bln (USD 388 mln) in underlying business profit during the quarter, exceeding the JPY 47.1 bln (USD 298 mln) generated by domestic operations. U.S. Steel alone contributed JPY 32.2 bln (USD 204 mln), helping offset weakness in Nippon Steel’s domestic steelmaking business.
For the full fiscal year, Nippon Steel maintained its underlying consolidated business profit forecast at JPY 700 bln (USD 4.43 bln) or more. Net profit is now projected at JPY 290 bln (USD 1.84 bln), up from its previous forecast of JPY 220 bln (USD 1.39 bln), while revenue is expected to reach JPY 11.2 trillion (USD 70.89 bln).
Nippon Steel Corporation, headquartered in Tokyo, is Japan’s largest steelmaker and the world’s third-largest steel producer. The company has consolidated global crude steel production capacity of around 76 mln tons per year, including 44 mln tons in Japan and 32 mln tons overseas, with a long-term target to expand capacity to 100 mln tons per year.
1 USD / 158 JPY