* Recurring profit for last FY up 32 pct on appraisal gains
* Domestic demand boosted by capex, Olympics projects
* No change for now in plan to build a plant in Mexico
(Adds executive comments)
By Yuka Obayashi
TOKYO, April 27 JFE Holdings Inc,
Japan's No.2 steelmaker, said it plans to hoist crude steel
output in the current fiscal year, tapping into the solid
domestic demand that helped lift earnings in the 12 months that
ended last March.
With companies raising capital spending and Tokyo's staging
of the 2020 Olympics stoking construction projects, JFE expects
to produce 29 million tonnes of crude steel in the 12 months
through March 2018, executive vice president Shinichi Okada said
on Thursday, up 3 percent from last year.
Okada was speaking at a briefing where JFE said recurring
profit - pre-tax earnings before one-off items - climbed almost
a third to 84.75 billion yen ($762 million) last fiscal year.
That number was boosted by hefty appraisal gains on inventories
of coking coal and other raw materials, as well as robust demand
at home and overseas.
The profit beat both JFE's estimate of 70 billion yen and a
consensus estimate of 77.3 billion yen from 10 analysts surveyed
by Thomson Reuters I/B/E/S.
But the firm didn't issue a profit forecast for this fiscal
"Our earnings outlook is unclear as coking coal prices have
surged after a cyclone in Australia and coal prices for
April-June term contract have not been settled," Okada said.
While inventory gains boosted last year's results, soaring
materials costs cut into its profit margins, he said.
The price of coking coal - a key steel-making ingredient -
has been volatile, nearly quadrupling between March and late
November last year, but then halving between then and the end of
the last fiscal year.
Last month brought a new twist, when Cyclone Debbie hit
Australia, cutting rail lines in the world's biggest coking coal
export region and sending prices higher again.
While rail links have been restored, Japanese steelmakers
have had to scramble for alternative supplies.
Mounting global trade tensions also cloud the outlook for
steelmakers including JFE.
U.S. President Donald Trump's move to order a probe into
whether imports of foreign-made steel are a national security
risk has unsettled non-American steelmakers, along with
uncertainty over whether he plans to withdraw the United States
from the North American Free Trade Agreement (NAFTA).
JFE and U.S. company Nucor Corp said last year they
would form a venture to build a plant in central Mexico to
supply automakers serving the NAFTA market.
"If any new U.S. measures that would affect our customers'
businesses emerge, we may have to think over. But there is no
change in our plan at the moment," Okada said.
($1 = 111.2300 yen)
(Reporting by Yuka Obayashi Additional reporting by Aaron
Sheldrick; Editing by Kenneth Maxwell)