Japan's top steelmaker Nippon swings back into black

TOKYO (AFP) - Nippon Steel & Sumitomo Metal Corp. said Thursday it swung to a profit for nine months to December on the back of strong demand in line with the nation's economic recovery.

The world's second-biggest steelmaker said net profit was 192.8 billion yen (S$2.4 billion) for the period, on sales of 4.0 trillion yen.

The steelmaker, created through the merger of Nippon Steel and Sumitomo Metal, reported a 151.9 billion yen net loss on sales of 3.1 trillion yen for the same period last year when the two firms were in the middle of the merger transition.

Rising domestic demand for steel has been boosted by government rebuilding programmes following Japan's quake-tsunami disaster in 2011.

"Domestic steel demand remained strong in the term under review," the company said in a statement.

"Reconstruction demand also stayed firm and economic policies began to show their full effects in the civil engineering and construction fields, while demand from the manufacturing industry increased on the back of a recovery in capital investment."

However, Nippon Steel said it faced headwinds as heavy production by Chinese mills pushed down global steel prices.

The steelmaker upgraded its full-year net profit forecast to 220 billion yen from its earlier estimate of 200 billion, yen due to gains from sales of shares.