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Tokyo Steel reported an operating loss of ¥2.31 billion for the first quarter of the fiscal year ending March 2026. JAH370W Hot dip galvanized steel strip,This result was primarily driven by rising scrap steel prices—fueled by tensions in the Middle East—where the surge in costs significantly outpaced the increase in steel product prices, leading to a narrowing of the metal spread per ton. Despite raising steel prices three times, profit margins remained squeezed. The company maintained its full-year operating loss forecast at ¥4 billion but raised its net profit forecast to ¥1 billion. Profitability is expected to improve in the second half of the fiscal year as the impact of price hikes takes hold and the product yield rate rises.
Tokyo Steel Manufacturing, a Japanese electric-arc furnace steelmaker, announced an operating loss of ¥2.31 billion on a non-consolidated basis for the first quarter of the fiscal year ending June 30, 2026; this contrasts with an operating profit of ¥4.77 billion recorded during the same period of the previous fiscal year.
During the quarter, net sales fell 1.3% year-on-year to ¥72.93 billion, while net profit dropped 49.5% to ¥1.88 billion. The company noted that gains from the sale of investment securities and other assets provided some support to its net profit.
Tokyo Steel pointed out that rising tensions in the Middle East drove a rapid increase in scrap steel prices, significantly squeezing profit margins. JAH370W Hot dip galvanized steel strip,Although the company has raised steel prices three times since the end of the previous fiscal year, these increases have not yet been fully reflected in actual shipment prices.
In terms of production, Tokyo Steel’s crude steel output for the first quarter stood at 838,000 tonnes, down 1.5% year-on-year, while rolled steel output was 767,000 tonnes, a decrease of 0.9% year-on-year.
During the same period, the company’s steel shipments totaled 739,000 tonnes, down 0.9% year-on-year; this comprised 629,000 tonnes for the domestic market and 109,000 tonnes for export.
Regarding pricing, the average sales price of Tokyo Steel’s products rose by 600 yen per tonne year-on-year to 96,800 yen per tonne. In contrast, the company’s average purchase price for scrap steel saw a significant year-on-year increase of 11,900 yen per tonne, reaching 55,200 yen per tonne.
As a result, the company's metal spread per ton of steel narrowed by 11,300 yen year-on-year to 41,600 yen. JAH370W Hot dip galvanized steel strip,The rise in scrap steel costs significantly outpaced the increase in steel selling prices, serving as the primary reason for the company swinging to an operating loss in the first quarter.
For the full fiscal year ending March 31, 2027, Tokyo Steel has maintained its sales forecast of 315 billion yen—representing a projected year-on-year increase of 17.5%—while also maintaining its forecast for a full-year operating loss of 4 billion yen.
However, the company has raised its full-year net profit forecast from the previous projection of zero to 1 billion yen. Even so, this figure still represents a 91.3% year-on-year decline.
Tokyo Steel anticipates that profitability will gradually improve in the second half of the fiscal year as earlier price hikes are progressively reflected in actual shipment prices. At the same time, the company will focus on increasing product yield, adjusting production volumes in line with market demand, and expanding sales of low-carbon steel products.
