25% U.S. duties on steel have no impact on Japanese companies' export earnings

Japan is among the top 10 steel exporters to the United States, which imposed a 25 percent tariff on steel imports in March, which President Trump said was aimed at limiting supplies from China.

"There has been no significant impact from US tariffs due to strong global demand," Nippon Steel's executive vice president Katsuhiro Miyamoto told Reuters in an interview late last week.

Nippon Steel accounts for about 4 percent of total US steel exports and more than 90 percent of its customers continue to buy Japanese products even after tariffs were imposed, as they are specialized products such as rails and seamless pipes.

Exports of Japanese steel to the United States rose 14 percent in April from a year earlier, after shipments fell 40 percent in March.

“We are closely monitoring where products that have been excluded for supply to the United States are being sold, as they could affect the Asian market if they come to this region,” Miyamoto said. About 70 percent of Nippon Steel's exports go to Asia.

High US steel tariffs could make Southeast Asia a new dumping ground for low-cost steel for global exporters looking for buyers, industry and traders, creating an oversupply that could drive prices down and induce some producers to close.

So far, Miyamoto is optimistic about Asian demand for steel.

“Japan's demand for construction and automobiles is solid. In China, consumer spending is also strong and there are many infrastructure projects around the stations such as subways and residential real estate, ”he said.

Given the expected growth in demand and increased spending on modernization of aging facilities, Nippon Steel plans to increase its crude steel output to more than 42.6 million tonnes this year.

According to Miyamoto, the Japanese company is also seeking to improve the profitability of the higher-priced products to offset rising costs for auxiliary materials, such as manganese and zinc, and logistics.