Japan Metals Sector: Implications of Tokyo Steel’s Q1 FY3/27 results

Research evidence excerpt

Japan Metals Sector: Implications of Tokyo Steel’s Q1 FY3/27 results

Global Research

17 July 2026ab

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EquitiesJapan Metals Sector

Implications of Tokyo Steel's Q1 FY3/27 results Japan

Mining & Metals

Harunobu Goroh

Tokyo Steel (5423: not covered) announced Q1 FY3/27 results Analyst

Q1 FY3/27 results show an operating loss of -¥2.3bn (-¥7.1bn yoy), beating the harunobu.goroh@ubs.com

consensus for a -¥3.6bn loss. Meanwhile, the loss widened versus the previous quarter +81-3-5208 6215

(-¥0.9bn). The main factor was worsening spreads due to the rise in scrap prices ahead Lihui Huang

of other factors. Full FY3/27 guidance was left unchanged at an operating loss of - Analyst

¥4.0bn. Although the company expects metal spreads to improve in H2 due to the effect lihui.huang@ubs.com

of price hikes, it factored in the risk of higher electricity costs. At the NP level, full-year +81-3-5208 6217

guidance was revised up by ¥1.0bn due to the booking of gains on sales of cross

shareholdings. The annual dividend forecast was left unchanged at ¥40/share (¥50/

share in FY3/26).

Raw material prices in Japan rising ahead of steek price hikes; lagging behind

other regions

Domestic steel scrap prices turned upward in October 2025, and had risen by around

¥14,000/tonne (+35%) from their trough by July 2026. Since August-September 2025,

major Chinese and Asian producers have raised steel product prices in stages alongside

the bottoming of raw material costs. In the US as well, the steel product price hike phase

has continued for 18 months since bottoming in January 2025. In Japan, steel prices

turned upward after the start of 2026. Tokyo Steel announced steel product list price

hikes for shipments in April-May 2026 for the second consecutive month, but the