Nippon Steel Forecasts 14% Profit Decline as U.S. Market Falters

Japan's biggest steelmaker, Nippon Steel, said it expects a 14% reduction in underlying profit for the year to March 2026, forecasting 680 billion yen versus 793.7 billion yen a year earlier as U.S. market weakness and rising operating costs weigh on results.

The company excluded the performance of U.S. Steel — acquired in June for roughly $15 billion — from its projections, citing unexpectedly soft conditions in the United States, higher equipment-related expenses and increased regional uncertainty.

U.S. Steel accounts for almost 40% of Nippon Steel's global crude steel capacity, which stands at about 66 million tonnes. Nippon Steel says the acquisition is central to its longer-term ambition of lifting worldwide output toward 100 million tonnes a year.

Earlier this week U.S. Steel outlined a $14 billion multi-year investment programme in partnership with Nippon Steel, with around $11 billion planned through 2028. The Japanese group expects those investments to strengthen its U.S. operations over time, despite short-term profit pressure.

For the six months ended September, Nippon Steel posted a loss of 113.4 billion yen, reversing a 243.4 billion yen profit from the same period last year. It also raised its full-year net loss forecast to 60 billion yen—about 50% higher than an earlier estimate—after recording a 21 billion yen loss linked to its exit from Brazilian peer Usiminas.

The firm is refocusing on priority growth markets — the United States, India and Thailand — and moving to divest non-core assets to reduce exposure. The sale of its minority stake in Usiminas to partner Ternium is part of that strategic repositioning.

While near-term figures are strained, Nippon Steel reaffirmed its commitment to global expansion and decarbonisation, saying sustained investment in the U.S. should eventually help restore profitability and cement its global leadership.