Mitsubishi Steel Mfg. Co., Ltd.

Business Details

A segment that manufactures and sells special steel products such as carbon steel, low-alloy steel, spring steel, bearing steel, and tool steel. Domestically, production is centered on Mitsubishi Steel Mfg. Muroran Special Steel Co., Ltd. at the Muroran combinate, supplying customers in the automobile and construction machinery industries. Overseas, the company operates in Indonesia (PT.MSM INDONESIA, PT.JATIM TAMAN STEEL MFG.) targeting the Southeast Asian market. Hokkai Iron & Steel Co., Ltd., an equity-method affiliate, is also included as a related company. In FY2026 (ending March 2026), the segment accounted for approximately 36% of consolidated net sales, but ceded its position as the largest segment to the Springs Business due to the impact of blast furnace trouble.

Recent Overview

Directly hit by blast furnace trouble and a fire accident, net sales fell 20.4% and the segment fell into an operating loss

In FY2026 (ending March 2026), net sales were ¥64,905 million (down ¥16,621 million, or 20.4%, year on year), and operating income/loss deteriorated by ¥4,342 million from operating income of ¥3,318 million in the prior period to an operating loss of ¥1,024 million. Equity-method affiliate Hokkai Iron & Steel Co., Ltd. experienced blast furnace trouble in September 2025 and hot stove trouble in December of the same year, worsening productivity across the entire Muroran combinate. The combination of lower domestic demand and reduced operating rate resulted in a significant decline in sales and a loss. The overseas business in Indonesia saw increased profit from higher volume and improved selling price and cost, but this could not offset the domestic decline. The blast furnace has resumed operation since April 2026, but stable operation and normalization of order intake are expected to take some time.

Key Products

Growth Drivers

• Strengthening the profit structure of the overseas business in Indonesia through manufacturing cost improvements and lowering the break-even point
• Diversifying domestic demand by developing new sales channels in energy-related and security fields, among others
• Strengthening the earning power of the domestic core business through factory DX promotion, personnel rationalization, and cost reduction
• Phased capacity expansion investment in anticipation of medium- to long-term growth in steel demand in Southeast Asia
• Normalization of operations at the Muroran combinate and recovery of order intake following the blast furnace restart in April 2026 (profit recovery expected from Q2 of FY2027 (ending March 2027) onward)

Risks

• Risk that stable operation and normalization of order intake will take time following the restart of Hokkai Iron & Steel Co., Ltd.'s blast furnace (limited outlook for profit improvement in Q1 of FY2027, ending March 2027)
• Downward pressure on sales volume due to continued weak domestic and overseas demand for construction machinery and automobiles
• Risk of demand fluctuation due to automakers reviewing production systems amid U.S. tariff policy
• Profit pressure from declining selling prices linked to falling raw material prices
• Decline in overseas demand due to weak automobile sales in Indonesia and Thailand stemming from stricter loan screening, among other factors
• Structural risk of declining sales due to the medium- to long-term contraction of the domestic market
• Increasing costs related to carbon neutrality measures (such as switching to CO2-free electricity)