U.S. Steel Boosts Nippon Steel Earnings Amid Higher Prices
The American unit is expected to account for 40% of the Japanese firm's quarterly profit
U.S. Steel became the main driver of Nippon Steel's results between July and September. The American unit accounts for about 40% of the company's total operating profit for the period. This performance surpasses the 30% share observed in the previous quarter.
The financial jump stems from the appreciation of steel in the United States. The cost per ton of hot-rolled product exceeded the Japanese company's internal estimates. Limited supply and import tariffs supported the price movement in the American market.
Demand for technology infrastructure also contributes to the scenario. The construction of data centers focused on artificial intelligence requires a large volume of steel inputs. This trend offsets the decline in profitability of domestic operations in Japan.
Nippon Steel's global operating profit faces pressure from high energy and transportation costs. The company projects a 28% drop in operating profit for the semester ending in September. The consolidated result is expected to reach 250 billion yen for the period.
Analysts note that the market expects a positive revision in projections for the American subsidiary. Nippon Steel will release its official figures this Thursday. Market consensus points to significant growth in net profit for the current fiscal year.
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