TOKYO (Reuters) ? Japan's top steelmakers Nippon Steel Corp and JFE Holdings Inc slashed full-year profit outlook by 20 percent, hit by a rapid deterioration in Asia's steel market, after booking about 50 percent fall in quarterly earnings.
Ebbing demand in China, the world's biggest consumer and producer, and an uncertain global economy are weighing heavily on the profits of Asian's steelmakers, already reeling from a supply glut and sagging prices in the region.
Japanese steelmakers, heavily exposed to Asia's steel market, face an even tougher outlook due to a strong yen and prices are expected to fall further in the export market.
Nippon Steel, the world's No.4 steelmaker, slashed its pretax profit outlook for the year to March 2012 to 180 billion yen ($2.38 billion) from its projection of 230 billion yen three months ago.
That compares with an average estimate of 206.8 billion yen in a poll of 18 analysts by Thomson Reuters I/B/E/S.
Its July-September profit fell 49 percent as a strong yen and weak demand in Asia squeezed margins on exports.
JFE, the world's No.5, expects its full-year profit to fall 40 percent to 100 billion yen, below a Thomson Reuters estimate of 121 billion yen.
That is down from its forecast three months ago of a profit of 130 billion yen. Its July-September profit fell 54 percent to 25.22 billion yen.
Nippon Steel shares closed down 2.4 percent at 204 yen after the results, but JFE finished up 4.4 percent at 1,459 yen.
The export outlook for Japanese steelmakers is deteriorating fast on the back of the strong yen and weak prices in Asia, outweighing a recovery in domestic car output.
Falling iron ore prices could drag down steel prices further in the second half. Steel prices are expected to fall more sharply than the cost of the key steel-making raw material when demand is weak.
(Editing by Joseph Radford and Vinu Pilakkott)
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