Nippon Steel swings to loss as oversupply hits sector

Japan's Nippon Steel & Sumitomo Metal said Thursday it swung to a loss in its fiscal first quarter as slowing Chinese demand and lacklustre sales at home dented its bottom line.

The Tokyo-based firm, one of the world's biggest steel producers, posted a net loss of 14.6 billion yen ($139 million) in the April-June period, reversing a 72.7 billion yen net profit a year ago.

Revenue tumbled nearly 17 percent to 1.05 trillion yen, it said.

"Overseas steel demand was flat, as the impact from the declining trend in Chinese demand was strong despite some moderate signs of recovery in ASEAN (Association of Southeast Asian Nations)," the company said.

Deadly earthquakes in Japan earlier this year forced customers, including the key automotive industry, to temporarily shutter factories, Nippon Steel said.

The firm, however, added that it would claw out of the red in the first half of its fiscal year to March 2017.

The global steel industry has suffered from oversupply and weakening demand as China's economic growth has slowed from the breakneck rates that helped global commodity suppliers grow fat off demand for big ticket infrastructure projects there.

Beijing has been accused of exacerbating the problem by dumping below-cost steel on to the world market, leading to trade disputes with the European Union and United States.

The issue was flagged again at a meeting of G20 nations this month in China, which says its is taking steps to cut production.