Japanese metals producers continue to cut profit forecasts, with Sumitomo Metal Mining Co. and Mitsubishi Materials Corp. the latest to warn of the impact of China’s slowdown.
Sumitomo Metal slashed its operating profit forecast by 37 percent to 74 billion yen ($600 million) for the year to March 31, after posting a 6.9 percent decline in the first half to 51.5 billion yen. It cited a significant fall in prices for the cut and warned that capital expenditure for the year would fall to 77.5 billion yen from 85.1 billion, according to a statement to the Tokyo Stock Exchange.
Mitsubishi Materials’ reduction in its forecast was less pronounced, down 2.4 percent to 83 billion yen, after a 6.3 percent increase in first-half operating profit to 36.2 billion yen, according to its own statement. The company is less reliant on metals for earnings.
The companies’ outlooks underscore the challenges facing metals producers as demand slows in China, the world’s biggest consumer. Mitsui Mining & Smelting Co., and top steel companies Nippon Steel & Sumitomo Metal Corp. and JFE Holdings Inc., have been among the companies to cut their full-year earnings forecasts in recent weeks.