JFE Holdings, the world’s sixth largest steelmaker, believes Asia’s steel market is still too fragile for it to upgrade its annual profit forecast.
The Japanese company made a return to profit in the last quarter that beat its own forecast. It was in contrast to a more upbeat view of the industry from one of its leading Asian rivals, South Korea’s Posco which ranks fourth globally.
Posco, predicting a 17% rise in its October-December operating profit, said the industry’s strong recovery would extend into 2010, driven by demand in emerging markets such as China and India.
JFE said market conditions in Asia remained opaque, with mills in China, the world’s biggest producer, boosting output and squeezing export prices, while South Korean rivals add new capacity.
JFE made ¥9.8bn ($106.7M) in July-September recurring profit before tax and special items as it cranked up output on the back of a government-backed boost for car sales. That was well below a year-earlier profit of ¥146.51bn ($1.59bn) but better than its own forecast in July for a ¥2.8bn ($30.4M) loss.