Nippon Steel stated that developments in the Middle East had a negative impact of approximately JPY 25 billion on its first-quarter underlying business profit.
The company noted that weak underlying demand in Japan and overseas markets, excess supply from China, trade measures imposed by various countries, and increasing regional economic fragmentation have widened differences among global steel markets.
The company also stated that developments in the Middle East increased raw material, fuel, and logistics costs, while steel exports to the region also declined.
Annual sales forecast raised to JPY 11.2 trillion
Nippon Steel raised its sales revenue forecast for FY2026, ending in March 2027, by JPY 200 billion from its previous estimate to JPY 11.2 trillion.
The company maintained its annual underlying business profit forecast at no less than JPY 700 billion. At least JPY 250 billion is expected to be generated in the first half of the fiscal year, while at least JPY 450 billion is expected in the second half.
The annual profit attributable to owners of the parent forecast was increased by JPY 70 billion from the previous estimate to JPY 290 billion. Nippon Steel expects underlying business profit in the second half of the fiscal year to reach an annualized rate of at least JPY 900 billion.
In the first quarter, underlying business profit from operations in Japan amounted to JPY 47.1 billion, while overseas operations generated JPY 61.3 billion. U.S. Steel recorded underlying business profit of JPY 32.2 billion during the first quarter.
Japan's crude steel production expected to reach 35 million mt
Nippon Steel stated that steel demand in Japan remains weak. The company expects crude steel production from its Japanese operations, including the former Nippon Steel Stainless business, to reach approximately 35 million mt in FY2026. Production totaled 33.88 million mt in FY2025.
Japan's total domestic steel demand is expected to decline from approximately 49 million mt in FY2025 to 48.5 million mt in FY2026.
Demand is expected to consist of approximately 16 million mt from the automotive sector, 17 million mt from other manufacturing industries, and 16 million mt from the construction and infrastructure sectors.
Nippon Steel lowered its annual underlying business profit forecast for its core steel operations in Japan by JPY 70 billion, from JPY 190 billion to JPY 120 billion, due to rising raw material and fuel costs as well as the impact of developments in the Middle East.
The company stated that approximately JPY 40 billion of the downward revision for its Japanese core steel operations was attributable to developments in the Middle East. The total negative impact of these developments on the group's annual underlying business profit is expected to be approximately JPY 60 billion.
Nagoya hot strip mill to begin commercial production in August
High-temperature testing at Nippon Steel's next-generation hot strip mill at its Nagoya Works began on April 1, 2026. The facility, with an annual production capacity of 6 million mt, is scheduled to commence commercial operations in August 2026.
The company stated that the new line will enable large-scale and stable production of high-quality products, particularly advanced high-strength steel sheets used in the automotive sector.
U.S. Steel to contribute at least JPY 180 billion in annual profit
Nippon Steel expects U.S. Steel to become one of the group's key earnings drivers in FY2026. U.S. Steel's annual underlying business profit forecast was raised by JPY 80 billion from the previous estimate, increasing from JPY 100 billion to at least JPY 180 billion.
The company expects approximately JPY 60 billion of the upward revision to result from higher U.S. steel prices and improved market conditions. The remaining JPY 20 billion is expected to come from cost improvements, operational synergies, and the full-year contribution of the restarted blast furnace.
Production continues to increase at U.S. Steel's Big River Steel 2 facility, which achieved a monthly record of 204,000 short tons in June 2026. Annual production at Big River Steel 2 is planned to increase from 1.4 million short tons in FY2025 to 2.5 million short tons in FY2026.
At Granite City Works, the No. B blast furnace with an annual capacity of 1.4 million mt was restarted at the end of March 2026 after an interruption of approximately two and a half years.
Meanwhile, refurbishment work on the No. 14 blast furnace at Gary Works, expected to take approximately 100 days, is scheduled for completion during the May-August 2026 period.
Approved U.S. investments reach USD 3.7 billion
As of August 2026, Nippon Steel has approved investment projects for U.S. Steel totaling approximately USD 3.7 billion.
Among the major approved projects is a USD 1.88 billion direct reduced iron (DRI) plant planned for the Big River facility. The DRI plant is scheduled for completion in 2029.
Other major investments include a USD 475 million expansion of the steel pipe quenching and tempering line at Fairfield Works, a USD 350 million refurbishment of the No. 14 blast furnace at Gary Works, and a USD 230 million modernization of the hot strip mill.
The total investment amount of approximately USD 3.7 billion announced by the company also includes other approved investment projects.
Capacity in India to increase to 15 million mt
Crude steel production capacity at AM/NS India's Hazira Works is planned to increase from approximately 9 million mt annually to 15 million mt.
Upstream production facilities and a hot strip mill providing approximately 6 million mt of additional capacity are expected to begin operations gradually from FY2027 onward.
The company stated that AM/NS India's domestic shipments increased year on year during the April-June 2026 period, while EBITDA increased by 31% compared to the previous quarter.
India's steel demand is expected to reach 171.6 million mt in 2026 and approximately 190 million mt in 2027.
The galvanizing line for automotive steel at the Hazira facility began operations in July 2025, while the pickling and cold rolling line commenced operations in April 2026. The cold rolling and aluminum coating line is scheduled to begin operations in the second half of FY2026.
Regional production and sales to be strengthened in Europe
Nippon Steel highlighted Nippon Steel Slovakia, with an annual crude steel capacity of 4.5 million mt, and Ovako, with an annual capacity of 1 million mt, as the core of its European operations.
The Slovakian facility primarily produces flat steel products, while Ovako manufactures specialty steel bars and wire rod using electric arc furnace technology.
The company expects regional sourcing trends in Europe to strengthen following the European Union's decision to reduce its duty-free steel import quota by 47% to 18.3 million mt and increase the tariff on imports exceeding the quota from 25% to 50%.
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