Nippon Steel has projected a 43% decline in its net profit for the fiscal year ending March 2026, citing ongoing pressures from a weak global steel market. The company pointed to China’s rising exports and the effects of new U.S. tariffs as key factors contributing to the downturn.
In a report released on Friday, Japan’s largest steelmaker forecast its net profit for the year ending March 31, 2026, to fall to 200 billion yen ($1.4 billion). This follows a 36% drop in profits for the year ending March 2025, which amounted to 350.2 billion yen.
Nippon Steel President Tadashi Imai explained that the global market is still struggling due to excess production and increased exports from China. These challenges stem from a widening supply-demand gap, worsened by China’s economic slowdown. Imai warned that these tough market conditions are expected to continue throughout the current fiscal year.
While the company anticipates limited direct effects from U.S. tariffs on its earnings, Imai acknowledged that the indirect impact could be substantial. He emphasized that Nippon Steel’s exports to the U.S. are relatively small and largely consist of specialized products.
The company is also closely monitoring the outcome of its $15 billion bid for U.S. Steel. Although former U.S. President Joe Biden rejected the proposal, the bid is now under review. The U.S. is expected to make a decision regarding the acquisition by June 5.
Imai reaffirmed that Nippon Steel remains committed to acquiring full ownership of U.S. Steel and will pursue negotiations with U.S. authorities. The company is also considering alternative strategies to secure approval.
U.S. President Donald Trump, who began his second term in January, initially showed support for a potential minority stake acquisition by Nippon Steel. This would, however, require significant changes to the deal’s structure.
In March, Trump instructed the Committee on Foreign Investment in the United States (CFIUS) to reexamine the bid and assess whether further actions were needed. Nippon Steel’s Vice Chairman, Takahiro Mori, who is leading the negotiations, said he expects a recommendation from CFIUS by May 21, with Trump’s final decision anticipated by June 5.
Mori maintained that Nippon Steel’s deal poses no threat to U.S. national security, though he acknowledged that the final outcome would depend on political factors, as the deal has grown into a broader political issue.
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