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Nippon Steel goes on offensive as Chinese industry retreats

Japan's top steelmaker stages a big earnings recovery, but is it a mirage?

Nippon Steel & Sumitomo Metal's factory in Oita, on Japan's southern island of Kyushu, resumed operations in August after closing due to a fire in January.

TOKYO -- Japan's largest steelmaker, Nippon Steel & Sumitomo Metal, is roaring toward 72% pretax profit growth for the fiscal year ending this March, expecting to log 300 billion yen ($2.64 billion). It is churning out most of its steel products at full capacity, and prices of hot-rolled sheet -- widely used in manufacturing -- and other products are rising.

This is a dramatic turnaround for a company that was struggling mightily only a year ago, with its steel business falling into the red for the first time in four years. Still, as President Kosei Shindo maps out the midterm plan scheduled to kick off this spring, he may be wondering how much of the robust growth is due to the company's own strength, and how much stems from Chinese state policy.

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