FY3/26 results review: steel industry, SWCC

Research evidence excerpt

FY3/26 results review: steel industry, SWCC

19 May 2026

Mizuho Securities Equity Research Steel Products / Steel & Iron

Industry Overview

Middle East a worry for blast furnace steelmakers; cautious plans at Daido, SWCC

Analyst: Summary

Hideto Tani Four steel companies under our coverage and SWCC released their 4Q

+81 3 6202 8615 FY3/26 earnings results over 8–15 May. While there were no major surprises,

hideto.tani@mizuho-sc.com differences emerged across companies in terms of how the situation in

the Middle East was factored in and the strength of guidance for FY3/27.

The operating environment for the three blast furnace steelmakers remains

challenging, with uncertainty increasing due to developments in the Middle

East. In contrast, Daido Steel and SWCC presented outlooks suggesting that

volume growth in their growth areas is progressing faster than expected.

Although approaches to factoring in Middle East risks vary by company,

the three blast furnace steelmakers appear more exposed, and we believe

particular caution is warranted for Nippon Steel and JFE Holdings, where such

risks are not reflected in guidance, leaving downside risk. Post-earnings share

price reactions were mixed. Shares of Nippon Steel and JFE Holdings showed

limited movement. Kobe Steel, where a dividend cut had been a concern but

dividends were ultimately maintained, rose 3.9%. Daido Steel and SWCC saw

larger share price declines, reflecting the larger shortfall versus consensus in

their issued guidance. We view both sets of guidance as conservative.

Our take on results

The structural challenges facing Japan’s steel industry remain unchanged,

namely gradually declining domestic demand, China’s high volume of steel

exports, and protectionist policies in various countries. On top of this,