* Nippon Steel FY17/18 profit up 71 pct, JFE profit jumps 155 pct
* Nippon Steel FY crude steel output fell 5 pct, but sees recovery
* Both firms see limited impact on their exports from U.S. tariffs (Recasts with JFE earnings and quotes)
By Yuka Obayashi
TOKYO, April 26 (Reuters) - Japan’s top steelmakers Nippon Steel & Sumitomo Metal Corp and JFE Holdings Inc on Thursday posted a jump in annual profits, led by solid local demand and higher prices for steel products.
Japanese steelmakers, enjoying the best market conditions in at least three years, have so far been able to shrug off fears of a U.S.-China trade war. Steel prices have risen on increased production by automakers and machinery makers, while construction is in full swing for Tokyo’s 2020 Olympics.
“Our U.S. customers continue to use our exported products which are mainly specialised products such as rails and pipes as they cannot be easily replaced,” Nippon Steel Executive Vice President Katsuhiro Miyamoto told an earnings briefing.
Nippon Steel, the country’s biggest steelmaker, posted a 71 percent jump in recurring profit for the year to March 31 while the second-ranked JFE reported a 155 percent surge.
The solid performances come despite lingering worries over global trade after the United States imposed import duties on steel, and follows a data cheating scandal at smaller peer Kobe Steel Ltd that undermined Japan’s reputation for manufacturing excellence.
Nippon Steel, the world’s fourth-largest steelmaker, only exports 700,000 tonnes of steel to the United States, which represents a mere 2 percent of its total shipments. But it is in fact getting a boost from higher U.S. steel prices as it produces about 7 million tonnes at steel mills there, he said.
“Still, we are concerned that other countries may take measures to block imports, which could hamper global free trade,” he said.
JFE’s Executive Vice President Shinichi Okada also noted that the U.S. tariffs had only limited impact so far, as the Tokyo-based company exports only specialised products.
“There has been little impact on our sales and production, but we’ll closely watch further development as we are worried that the trade dispute could weigh on the global economy,” Okada said.
Nippon Steel’s recurring profit for the last year came to 297.54 billion yen ($2.72 billion), just shy of its own forecast of 300 billion yen and below a mean estimate of 309.95 billion yen among 13 analysts surveyed by Thomson Reuters I/B/E/S.
It did not provide an earnings forecast, but a Thomson Reuters survey of 13 analysts has forecast a mean recurring profit of 342.8 billion yen for the year through March 2019.
JFE’s recurring profit totalled 216.34 billion yen in the year just ended, missing its own guidance of 220 billion yen and a mean estimate of 230.15 billion yen among 10 analysts.
JFE forecast 220 billion yen in recurring profit for the current financial year, short of a mean forecast by 10 analysts of 248.93 billion yen.
Both Nippon Steel and JFE had lower crude steel output last year due to system troubles and bad weather, but they expect to boost production this year.
$1 = 109.3100 yen Reporting by Yuka Obayashi; Editing by Tom Hogue