Mitsui Kinzoku Company, Limited

Business Details

Manufactures and sells Copper Foil (Carrier-attached Ultra-thin Copper Foil / Electrolytic Copper Foil for Printed Wiring Boards), Exhaust Gas Purification Catalyst, Functional Powder (Metal Powder for Electronic Materials, etc.), Battery Materials (Hydrogen Storage Alloy / Lithium Manganate), Rare Materials (High-purity Tantalum Oxide / Semiconductor Device Protective Film Materials, etc.), Ceramics Products, and Sputtering Targets (ITO, etc.). Main customers include semiconductor package substrates, multilayer boards for AI servers, smartphones, and motorcycles. With the organizational restructuring in April 2025, the Exhaust Gas Purification Catalyst business was transferred from the Mobility division, expanding the segment scope.

Recent Overview

Sales and profit both increased substantially due to higher copper foil sales volume and rising precious metal prices, marking a new record high

For FY2026 (ending March 2026), Functional Materials segment sales were ¥319,553 million (up 33.4% year on year), and segment ordinary income was ¥66,542 million (up 65.0% year on year), representing substantial increases in both sales and profit. The main factors were increased sales volume of copper foil (for AI servers and semiconductor package substrates), rising prices of precious metals such as palladium and rhodium, and sales price revisions and sales mix optimization reflecting demand trends. Expansion of production capacity for electrolytic copper foil for high-frequency substrates, along with additional expansion from FY2026 (ending March 2026) onward, has also been decided. Functional Materials segment ordinary income for FY2027 (ending March 2027) is forecast at ¥67,000 million, roughly in line with the previous fiscal year.

Key Products

Growth Drivers

• Increased sales volume of Carrier-attached Ultra-thin Copper Foil and electrolytic copper foil for high-frequency substrates driven by expansion of the semiconductor and AI server markets
• Solid demand for metal powder for electronic materials for multilayer ceramic capacitors (including atomized copper powder) and expansion of production capacity
• Expansion of supply capacity through increased production capacity for electrolytic copper foil for high-frequency substrates (additional phased expansion decided from FY2026 (ending March 2026) onward)
• Rising sales prices for sputtering targets and exhaust gas purification catalyst due to increases in precious metal prices such as indium, palladium, and rhodium
• Solid demand for motorcycle exhaust gas purification catalyst in India and China
• Launch of the next-generation battery materials business through construction of the initial mass-production plant for Solid Electrolyte for All-Solid-State Batteries (A-SOLiD®)
• Acceleration of advanced materials R&D utilizing the Kyushu Advanced Materials Development Center (established April 2026)
• Aggressive growth investment including expansion of the buy-side M&A budget under the FY2025 Mid-term Management Plan (from the original plan of ¥24.0 billion to ¥60.0 billion)

Risks

• Risk of inventory valuation losses due to fluctuations in non-ferrous metal prices (indium, palladium, rhodium, etc.)
• Risk of decreased yen-converted sales of overseas subsidiaries due to foreign exchange rate movements (yen appreciation)
• Risk of fluctuations in copper foil and functional powder sales volume due to demand fluctuations in the semiconductor and smartphone markets
• Geopolitical risk to Asian bases such as Taiwan, China, and Malaysia (deterioration in U.S.-China and Japan-China relations)
• Risk of export restrictions and tariff increases due to U.S. protectionist trade policy
• Long-term risk of decreased hydrogen storage alloy demand due to the shift from hybrid vehicles to electric vehicles
• Risk of weak demand for high-purity tantalum oxide due to deterioration in the smartphone SAW filter market environment
• Risk of decreased sales volume of display-use sputtering targets due to progress in local procurement by overseas panel makers
• Risk of resource and energy price fluctuations due to escalating tensions in the Middle East and restrictions on navigation through the Strait of Hormuz

Business Details

Engages in the manufacture and sale of Zinc, Lead, Copper, Gold, and Silver, as well as the Resource Recycling business. Builds a domestic and overseas smelting network through smelting subsidiaries and affiliates such as Kamioka Mining, Hikoshima Smelting, Miike Smelting, Hachinohe Smelting, and Pan Pacific Copper. This is a market-linked segment where LME prices, foreign exchange, and inventory factors directly affect earnings, and responding to recycling needs amid the advance of a circular economy is positioned as a strategic priority.

Recent Overview

Ordinary income up 68.7% year on year on rising non-ferrous metal prices such as zinc and improved inventory factors

For FY2026 (ending March 2026), the Metals Segment achieved sales (including internal sales) of ¥376,689 million, up 15.9% year on year, and ordinary income of ¥75,085 million, up 68.7% year on year, representing a substantial profit increase. This was mainly due to margin improvement from rising non-ferrous metal prices such as zinc, as well as an improvement in inventory factors associated with price fluctuations. Although there was a negative factor of deteriorating procurement terms for overseas ore, rising domestic prices of gold and silver also contributed. Equity in earnings of affiliates also increased substantially, from ¥2,987 million in the previous fiscal year to ¥5,069 million.

Key Products

Growth Drivers

• Rise in LME prices of non-ferrous metals such as zinc and precious metals (in FY2026 (ending March 2026), zinc, gold, silver, and indium prices rose year on year)
• Improvement in inventory factors associated with price fluctuations (substantial improvement in FY2026 (ending March 2026))
• Strengthening of recycled raw material processing utilizing the smelting network and expansion of recycling needs
• Increase in investment income from equity-method affiliates (up ¥2,082 million year on year)
• Expansion of metal material supply through use of low-carbon energy toward realizing a circular economy
• Maintenance and expansion of domestic zinc sales volume through acquisition of new customers

Risks

• Risk of decline in LME prices of zinc, lead, and precious metals (a structure where earnings are directly linked to market conditions)
• Risk of deteriorating profitability due to yen appreciation
• Risk of decreased zinc and lead sales volume due to weak automobile production and construction demand
• Risk of deteriorating procurement terms for overseas ore (also materialized in FY2026 (ending March 2026))
• Risk of decreased export zinc sales volume (decreased in FY2026 (ending March 2026))
• Geopolitical risk (Middle East situation, U.S.-China relations) affecting resource and energy prices and raw material procurement

Business Details

A segment whose main product is Automotive Door Locks (Side Door Latches) manufactured and sold by Mitsui Kinzoku ACT Corporation. Renamed from "Mobility" to "Automotive Parts" following the organizational restructuring effective April 1, 2025. Following the transfer of all shares of the company on November 4, 2025, only the six-month results from April to September 2025 were recorded for the current consolidated fiscal year (FY2026, ending March 2026). From FY2026 (fiscal year), this segment will disappear from reporting segments, and the company will transition to a three-segment structure of "Functional Materials," "Metals," and "Other Businesses."

Recent Overview

All shares of Mitsui Kinzoku ACT transferred in November 2025; segment to disappear from FY2026 (fiscal year)

As part of the search for a best owner amid dynamic management of the business portfolio, all shares of Mitsui Kinzoku ACT Corporation, the manufacturer and seller of automotive door locks, were transferred on November 4, 2025. As a result, sales of ¥51,218 million and an ordinary loss of ¥849 million for the current consolidated fiscal year reflect only the six-month results from April to September 2025. A loss on sale of shares of affiliated companies of ¥19,074 million was recorded as an extraordinary loss. From FY2026 (fiscal year), the Automotive Parts segment will disappear from reporting segments, and the company will transition to a three-segment structure.

Key Products

Growth Drivers

• Not applicable (segment to disappear from FY2026 (fiscal year))

Risks

• Recording of a loss on sale of shares of affiliated companies of ¥19,074 million associated with the transfer of Mitsui Kinzoku ACT shares (extraordinary loss for FY2026, ending March 2026)
• No future earnings contribution from the automotive parts business due to segment dissolution
• Distortion in year-on-year comparison due to recording of only six-month results (sales down 46.6% year on year, ordinary income/loss worsened by ¥1.5 billion)

Business Details

The Mitsui Mining & Smelting Group's "Other Businesses" segment is centered on Various Industrial Plant Engineering, Copper and Copper Alloy Products, Perlite Products, Die-cast Products, and Powder Metallurgy Products. Earnings are supported by orders for large-scale construction projects for domestic group companies and overseas customers, as well as equity in earnings of affiliates. Positioned to complement the core Functional Materials and Metals segments, sales remained roughly flat in FY2026 (ending March 2026), despite the impact of the transfer of some consolidated subsidiaries during the fiscal year.

Recent Overview

External sales decreased due to subsidiary transfer, but segment profit rose substantially on strong plant engineering and increased equity-method income

For FY2026 (ending March 2026), the "Other Businesses" segment saw sales to external customers of ¥98,595 million (down ¥8,177 million year on year) due to the impact of the transfer of some consolidated subsidiaries during the fiscal year. On the other hand, orders for large-scale construction projects for domestic group companies and overseas customers remained solid, and equity in earnings of affiliates expanded to ¥2,286 million (up ¥649 million year on year), resulting in a substantial improvement in segment profit to ¥3,993 million (up ¥2,310 million year on year, a change rate of 137.2%). The full-year segment ordinary income forecast for FY2027 (ending March 2027) is ¥8 million, a significant decrease reflecting the shrinkage of the earnings base following the subsidiary transfer.

Key Products

Growth Drivers

• Continued orders for large-scale construction projects for domestic group companies and overseas customers contributing to sales in the industrial plant engineering division
• Increase in investment income from equity-method affiliates (¥2,286 million in FY2026 (ending March 2026), up ¥649 million year on year)
• Improvement in capital efficiency through dynamic management of the business portfolio (search for best owners)
• Promotion of drastic cash generation measures under the "FY2025 Mid-term Management Plan"

Risks

• Risk of loss of sales and profit due to third-party transfer of subsidiary shares (FY2027 (ending March 2027) segment ordinary income forecast of ¥8 million represents a substantial decrease)
• Risk of decreased orders for plant engineering in the domestic non-ferrous metal-related field
• Risk of costs arising from trust recovery and recurrence prevention measures associated with improper conduct such as rewriting of product inspection certificates at Mitsui Kinzoku Perlite Co., Ltd.
• Segment profit margin remains at a low level, with limited resilience to cost increases or demand decreases
• Increasing dependence on equity in earnings of affiliates, creating a risk that deteriorating performance at equity-method affiliates directly impacts segment profit