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Japanese Steelmakers Gain Following Strong Export Data

By Justina Lee


Shares of Japanese steelmakers are trading higher Thursday, after data showed that the country's exports rose in May--largely due to strong overseas demand for steel and mineral fuels.

Shares of Nippon Steel Corp. rose as much as 3.2%, taking gains this year to 14%. Kobe Steel Ltd. added 3.3% and Tokyo Steel Manufacturing Co., Ltd. rose 2.7%, extending year-to-date gains to 22% and 14%, respectively.

Japan, one of the world's largest exporters of steel, said Thursday that exports rose 15.8% on year, marking a 15th consecutive monthly increase.

Steel prices could trend higher as Chinese infrastructure demand kicks in for the second half of the year, analysts from Fitch Solutions said in a research note. Dwindling exports from Ukraine due to the Russian invasion, as well as an unwillingness from some market participants to import Russian-made steel, are also supporting prices of the material, they said.

Nomura analysts cautioned in a note that rising costs may pressure steelmakers in the near term, with higher crude oil prices along with a weaker yen likely to push up energy costs.

"In Japan...high steel inventories make it difficult to pass on higher costs stemming from yen depreciation to product prices, and this, too, reduces the benefits of yen depreciation relative to normal conditions," they said.

Nomura has a buy rating on Nippon Steel and a neutral rating on Tokyo Steel.


Write to Justina Lee at


(END) Dow Jones Newswires

June 16, 2022 00:18 ET (04:18 GMT)

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