Nippon Steel FY Profit Down 95% After One-Off Losses from USS Deal
Nippon Steel posted a net profit of 17.2 billion yen ($109 million) for its fiscal year that ended March 31, 2026, the global steelmaker reported Wednesday. ManufacturingDive.com noted that “was down 95% from a year ago as the company navigated weak market conditions and one-off losses following the U.S. Steel acquisition last summer.”
Manufacturing Dive reported: “The U.S. steel market is overwhelmingly large globally,” with a current estimated demand of 150 million tons and potential for future market growth, Tadashi Imai, representative director, president and COO of Nippon Steel, said in a statement Wednesday. Despite an underlying business loss of 5.6 billion yen ($35.5 million) for the year, according to Manufacturing Dive, US Steel is expected to eventually be a profit driver for Nippon Steel. “Nippon Steel said US demand is stable as steel exports and imports decline,” the publication reported.
The acquisition of US Steel, which closed last June, totaled $14.9 billion and included a commitment of more than $11 billion in new investments by Nippon Steel, as well as a ‘golden share’ for the American government.
Current and upcoming USS investments are “necessary and effective” for enhancing the subsidiary’s corporate value, Imai said. “There are no issues with their profitability,” Imai said about US Steel, according to Manufacturing Dive.
Looking ahead, Nippon Steel said it expects a business profit of 700 billion yen ($4.4 billion) for fiscal year 2026, excluding impacts from the Middle East. US Steel is expected to contribute more than 100 billion yen during the period.
U.S. Operations and Investment Activity
For FY2026, Nippon Steel forecasts underlying business profit of ¥700.0 billion ($4.76 billion) or more, with the second half run rate annualized at ¥800.0 billion ($5.44 billion), driven by a recovery in U.S. Steel earnings. U.S. Steel is expected to contribute more than ¥100 billion ($680 million) to the FY2026 result, with profit attributable to owners forecast at ¥220.0 billion ($1.50 billion) as one-off losses from the transaction roll off. The company’s medium-term framework, restated alongside the FY2025 results, targets U.S. Steel underlying business profit of approximately ¥150 billion ($1.02 billion) on full-year consolidation and the ramp-up of Big River 2, rising toward ¥250 billion ($1.70 billion) after FY2028 as the product mix shifts toward higher value-added grades and the announced $11.0 billion U.S. capital expenditure program reaches full realization.
Big River 2, the new electric-arc-furnace mini-mill at U.S. Steel’s Big River Works in Osceola, Arkansas, is the swing factor in Nippon Steel’s U.S. earnings recovery. Through the FY2025 consolidation window, Nippon Steel guided utilization across U.S. Steel’s mini-mills, including the existing Big River, to rise progressively from roughly 63% toward approximately 86% by the January–March 2026 quarter, a level the company characterized as essentially a return to normal operations, with BR2’s first full-year earnings impact expected in FY2026 as the ramp completes. Beyond BR2 itself, Nippon Steel last month announced a $1.9 billion investment in a direct reduced iron plant at the Big River Works site, with completion targeted for the first quarter of 2029, extending the Arkansas footprint into upstream feedstock for the EAF platform.
In parallel, U.S. Steel has a slate of projects underway at its existing integrated operations, including the relining of a blast furnace and a hot strip mill upgrade at Gary Works in Indiana, the installation of a new slag recycler at Mon Valley Works in Pennsylvania, and a new premium thread line at Fairfield Works in Alabama. These projects sit alongside Nippon Steel’s previously announced commitments to invest no less than $1 billion to replace or upgrade the existing Mon Valley hot strip mill and approximately $300 million to revamp the No. 14 blast furnace at Gary Works, capital that the company has said is intended to extend the production life of two of U.S. Steel’s critical integrated assets. President and COO Tadashi Imai described the current and upcoming U.S. Steel investments as “necessary and effective” for enhancing the subsidiary’s corporate value, adding that Nippon Steel has begun to enhance U.S. Steel’s manufacturing capabilities with its own techniques and bring new products to market.