Toho Zinc Co.,Ltd.

Business Details

The core business engaged in the manufacture and sale of Lead Products, Electrolytic Silver, gold, Sulfuric Acid, and other products. The Annaka Smelter and Toho Kishima Smelting Co., Ltd. (lead and silver production) are the main production sites. Based on the business revitalization plan, the zinc smelting business has already been transferred to the Metal Recycling segment, and the current base business centers on lead and silver smelting, with emphasis on strengthening the recovery and sale of by-product rare metals such as Gold, Bismuth and Other Rare Metals.

Recent Overview

A surge in silver and gold prices combined with higher gold sales volume drove a 40% year-on-year increase in revenue, with ordinary income also increasing

In FY2026 (ending March 2026), the Smelting segment posted revenue of ¥103,952 million (up ¥29,668 million, or 40%, year on year) and ordinary income of ¥3,793 million (up ¥222 million, or 6%, year on year). The London silver price surged to a full-year average of $53.1/toz (versus $30.4/toz in the prior year), pushing up domestic selling prices, while increased sales volume of gold products and higher prices for bismuth and other rare metals also contributed. On the other hand, rising raw ore prices and deteriorating purchase terms, along with persistently elevated procurement prices for lead recycling raw materials, were factors reducing earnings, limiting the increase in profit relative to the increase in revenue.

Key Products

Growth Drivers

• A substantial rise in gold and silver prices (silver full-year average of $53.1/toz, $84.4/toz in Q4) drove higher selling prices and expanded earnings
• Expansion of by-product earnings due to increased sales volume of gold products and higher prices for rare metals such as bismuth and antimony
• Improvement in the Smelting segment's earnings structure following the completion of the transfer of the zinc smelting business to the Metal Recycling segment under the business revitalization plan
• Increased utilization of lead recycling raw materials and higher lead recycling ratio through collaboration with companies across the lead battery value chain
• FY2027 (ending March 2027) forecast: Smelting segment ordinary income of ¥2,900 million (a forecast decline versus the prior year, but based on a conservative silver price assumption of $80/oz, well below the actual $53.1/oz)

Risks

• Pressure on smelting margins due to deteriorating ore purchase terms (TC/RC terms)
• Rising costs due to persistently elevated procurement prices for lead recycling raw materials
• Metal price volatility risk (in particular, expanding deferred hedge losses associated with rising precious metal prices, which could strain the financial base)
• Adverse impact on export profitability and domestic selling prices from yen appreciation
• Risk of recurrence of production troubles such as the sluggish operations seen in H1 (lead production volume declined in H1 of FY2026, ending March 2026)
• Operational risk similar to the fire accident at the Onahama Smelter that occurred in September 2025 (affecting the Environment & Recycling segment)
• Soil contamination issue related to non-ferrous slag products previously shipped from the Annaka Smelter (a contingent liability; a reasonable estimate of the impact amount is currently difficult)