Kobe Steel, Ltd.
5406・Prime Market・Iron & Steel
Steel & Aluminum
Kobe Steel's core basic materials segment. Central to the materials-based business with steel products and aluminum sheet as mainstays.
| Period | Current | Previous | Change |
|---|---|---|---|
| Net sales (external customers) | ¥961,469 million | ¥1,078,015 million | ↓ |
| Total segment net sales (including intersegment) | ¥996,917 million | ¥1,116,160 million | ↓ |
| Segment profit (ordinary income basis) | ¥2,885 million | ¥23,658 million | ↓ |
| Segment assets | ¥1,168,557 million | ¥1,203,027 million | ↓ |
| Depreciation and amortization | ¥61,481 million | ¥61,829 million | — |
| Increase in tangible and intangible fixed assets | ¥68,050 million | ¥57,264 million | ↑ |
Business Details
The core segment of the materials-based business, comprising steel products such as wire rod, bar, sheet and plate, and aluminum sheet used mainly for automotive and HDD applications. Principal sales channels are mainly for automotive, industrial machinery, and social infrastructure applications through Shinsho Corporation. As the largest segment, accounting for approximately 40% of consolidated net sales, it competes with domestic and overseas blast furnace, electric furnace, and aluminum manufacturers. In FY2026 (ending March 2026), both sales volume and prices for steel and aluminum sheet fell below the prior year, resulting in a significant deterioration in segment profit.
Recent Overview
Both sales volume and prices deteriorated for steel and aluminum sheet, resulting in a sharp decline in segment profit of approximately 88% year on year.
In FY2026 (ending March 2026), Steel & Aluminum segment net sales (including intersegment) decreased 10.7% year on year to ¥996,917 million. In steel, a decline in sales volume due to sluggish construction demand combined with deteriorating metal spreads and worsening inventory valuation impacts caused ordinary income to plunge by ¥204 million year on year to ¥3,800 million (on a disclosed basis). Aluminum sheet deteriorated to an ordinary loss of ¥9 million due to a decrease in volume from the deconsolidation of Kobelco Aluminum Automotive Products (Tianjin) and a reduction in inventory valuation gains. Total segment profit fell sharply to ¥2,885 million from ¥23,658 million in the prior year. For the next fiscal year, an increase in profit is expected due to improvement in inventory valuation impacts and cost improvements.
Key Products
Growth Drivers
- Recovery in steel earnings in the next fiscal year through improvement in inventory valuation impacts and cost improvements to offset deteriorating metal spreads
- Improvement in profit/loss through increased sales volume of aluminum sheet for beverage can materials and IT/semiconductor applications and progress in price pass-through
- Continued promotion of price pass-through for cost inflation (personnel costs, logistics costs, etc.)
- CO₂ reduction measures in the production process through increased HBI blending in blast furnaces, maintaining competitiveness
- Strengthening of production capacity and quality competitiveness through capital expenditure of ¥68,050 million in increases in tangible and intangible fixed assets
Risks
- Delayed recovery in sales volume due to continued sluggish demand for automotive steel products and aluminum sheet
- Risk of metal spread deterioration due to fluctuations in raw material prices (iron ore, coal, aluminum ingot)
- Increased costs, mainly fixed costs (depreciation and amortization remaining at a high level of ¥61,481 million)
- Delayed demand recovery and intensifying competition in the Chinese market amid a real estate slump and sluggish personal consumption
- Risk of spillover effects on demand from export industries due to U.S. trade policy (tariffs)
- Earnings instability due to fluctuations in inventory valuation impacts
Last updated: June 18, 2026