Sumitomo Metal Mining Co., Japan’s biggest nickel producer, cut its first-half profit forecast as China’s slower demand weakens commodity prices more than anticipated.
Net income is expected to fall to 45 billion yen ($361 million) for the six months to Sept. 30, down 19 percent from a year earlier and below its May estimate of 46 billion yen, the company said Friday in a statement.
Sales are pegged at 465 billion yen, unchanged from its previous forecast, while its operating profit target was cut by 5.5 percent to 52 billion yen. The company kept its full-year earnings guidance.
Nickel and copper prices are suffering from slowing growth in China, the company said. Last month, it reversed its outlook for the global nickel market to predict a surplus of 12,000 metric tons in 2015, compared with its April forecast for a 5,000-ton deficit.
For the first three month of the financial year to March, Sumitomo Metal reported a 42 percent gain in net income and a 25 percent increase in operating profit, as a weaker yen and increased sales helped offset the slump in commodity prices.
The company’s first-half earnings outlook assumes an average price of nickel at $5.71 a pound, equivalent to about $12,588 a metric ton. Nickel is trading in London at $10,815 a ton.