Nippon Steel expects profit to drop 43% this year, US Steel decision by early June

Nippon Steel expects net profit to slide 43% in the fiscal year ending March 2026, it said on Friday, citing a weak global steel market pressured by China’s exports and the impact of new US tariffs.

Japan’s biggest steelmaker also said it expects a US decision on whether to approve the company’s proposed acquisition of US Steel by June 5.

Nippon Steel forecast net profit for the year through March 31, 2026 would fall to 200 billion yen ($1.4 billion), after reporting on Friday that profit fell 36% in the year ended March 2025 to 350.2 billion yen.

“Excess production and increased exports from China, driven by a widening supply-demand gap amid the economic slowdown, show no signs of easing, and this difficult environment is expected to persist through the current fiscal year,” President Tadashi Imai told a news conference.

“The indirect impact of the US tariffs on our earnings could be significant,” he added, while noting that direct effects will be limited as exports to the US are small and consist of mainly hard-to-substitute products.

Nippon Steel’s $15 billion bid for US Steel, rejected by former US President Joe Biden, is under review.

“We’ll take all necessary steps to ensure the transaction closes,” Imai said.

Imai reiterated Nippon Steel’s core proposal to acquire full ownership of US Steel remains the starting point in negotiations with US authorities, though the company is also exploring various proposals to secure approval.

US President Donald Trump, who began his second term on January 20, initially stated he “wouldn’t mind” if Nippon Steel bought a minority stake in US Steel. Such a scenario would require an overhaul of the deal structure.

In March, Trump directed the Committee on Foreign Investment in the United States (CFIUS), which reviews foreign investment for national security risk, to reexamine the bid to determine whether “further action” would be appropriate.

Nippon Steel’s vice chairman Takahiro Mori, a lead negotiator on the deal, said he expects CFIUS to make a recommendation to Trump by May 21, with a final decision from Trump anticipated by June 5.

“We continue to believe that the US Steel deal poses no risk to US national security,” Mori said. “But the outcome will ultimately hinge on Trump’s decision, as the deal has become a political issue beyond just national security considerations.”

($1 = 145.3300 yen)

(By Katya Golubkova and Yuka Obayashi; Editing by Muralikumar Anantharaman, Christopher Cushing and Susan Fenton)