Nippon Steel Lowers Profit Forecast Amidst Raw Material Challenges, Yet US Steel Deal Remains Steady

Profit Forecast Revision: A Closer Look On November 7, Nippon Steel announced a revised net profit outlook of 310 billion yen ($2 billion), down from an earlier projection of 340 billion yen. This adjustment is primarily attributed to inventory valuation losses stemming from weak raw material prices. The steel sector has been under significant pressure, with prices fluctuating due to various global economic factors, including demand shifts and geopolitical tensions. The impact of these factors on inventory valuation underscores the vulnerability of steel manufacturers in today's economic climate. ### Continued Commitment to Dividends Despite the downward revision in profit expectations, Nippon Steel has reaffirmed its commitment to maintaining its full-year dividend target at 160 yen per share. This decision reflects the company's efforts to reassure investors of its financial stability and commitment to shareholder returns. The ability to uphold dividend payments, even amidst profit declines, is a positive signal to the market and highlights Nippon Steel's robust operational strategies. The US Steel Acquisition: A Bright Spot Amidst the challenges, Nippon Steel is making strides with its acquisition plans for US Steel. The company has indicated that the deal is on track, which could potentially bolster its position in the global market. The acquisition is seen as a strategic move to expand its operational footprint and diversify its product offerings. Analysts believe that this acquisition could provide Nippon Steel with greater leverage in navigating the complexities of the steel market, particularly in North America, where demand remains strong.