Japan’s Trading Houses Brace for More Pain From China Steel Glut

Japan’s major trading houses are facing a prolonged slump in iron ore and coking coal prices as Chinese steel exports flood into Asia and beyond, constraining profits for at least the next six months.

Executives from Mitsubishi Corp. and Itochu Corp. said a supply glut would continue into the second half of their fiscal year through March, compounding the declines in quarterly profit reported over the last week by the metals segments of every big Japanese trading conglomerate.

Steel exports from China, the world’s largest producer, have surged to record highs as a sharp downturn in the domestic property market ...