Tokyo Steel Q1 FY2027 Performance and Outlook
Tokyo Steel released its first‑quarter results for fiscal year 2027, reporting an operating loss of ¥2.3 billion, which is consistent with the company’s prior guidance of a ¥2.0 billion loss. The loss was driven primarily by a sharp increase in scrap steel input costs, which climbed to ¥55,200 per ton during the April‑June period, up from ¥47,000 per ton in the preceding January‑March quarter.
Average selling prices for steel rose to ¥96,800 per ton in the quarter, compared with ¥92,700 per ton in the prior quarter. Despite the higher selling price, the margin fell by ¥4,100 per ton, translating into a ¥3.0 billion reduction in operating profit. The company noted that lower‑than‑expected costs added ¥1.6 billion to the loss, while latent gains of ¥1.0 billion partially offset the margin pressure.
Domestic sales volumes increased to 629,000 tons in Q1, up from 608,000 tons a year earlier, indicating a modest volume growth despite the cost environment. In addition, Tokyo Steel recorded ¥3.4 billion in gains from securities sales during the quarter, contributing positively to its financial position.
Looking ahead, the steelmaker expects its second‑quarter operating loss to narrow to ¥1.7 billion, an improvement from the ¥2.3 billion loss reported for Q1. It forecasts average selling prices to rise further to ¥104,000 per ton, while anticipating a slight increase in scrap steel costs to ¥55,700 per ton.
Most notably, Tokyo Steel raised its full‑year net profit guidance to ¥1.0 billion, up from a prior expectation of zero profit, reflecting confidence that the improved pricing environment and ancillary gains will offset cost pressures for the remainder of the fiscal year.
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