Sumitomo Metal Industries Limited forecasts a third year of losses after an affiliate took charges to reorganize itself and asked Japan's third largest steelmaker for support.

It said that Sumitomo Metal will probably have a loss of JPY 55 billion for the financial year ending March 31st 2012. In October 2011, the company estimated it would break even for the year.

The company is preparing to merge with Nippon Steel Corporation on October 1st 2012 to create the world's second biggest steelmaker and meet competition from Chinese and South Korean rivals.

Nippon Steel, Japan's largest steelmaker, last week cut its full year profit target to zero. JFE Holdings Inc, the second biggest, forecast its first annual loss since it was created from the merger of Kawasaki Steel Corporation and NKK Corporation in 2002. Kobe Steel Limited forecast a JPY 20 billion loss this fiscal year, the first in three years.

(Sourced from www.bloomberg.net)