January 5, 2026
JFE Steel Corporation

Mr. Hirose’s 2026 New Year’s Message to the JFE Team

Happy New Year, everyone. Dream for your Future, Steel takes you Further.

Safety Takes Precedence Over Everything Else: Renewing Our Commitment

Last year, four serious accidents occurred in our Group, claiming precious lives. I express my deepest and most sincere condolences. Let us renew our commitment to putting safety ahead of everything else to prevent this kind of tragedy from happening again. This year, we will continue to practice strict compliance with rules, strive to identify risks at an early stage, make improvements, and strengthen our safety capabilities across the entire Group.

FY2026 Is the Midpoint of Our Eighth Business Plan:
Act Boldly and Execute with a Focus on Accelerated Results

Last year, we announced our Long-term Vision toward 2035 and our Eighth Medium-term Business Plan, taking another step toward our future aspirations. We are making progress on various initiatives, including rebuilding our domestic production structure, strengthening our sales strategy, pursuing our overseas business strategy, expanding our solutions business, and advancing our carbon neutrality and DX strategies.

FY2026 marks the midpoint of our Eighth Medium-term Business Plan. Thinking carefully about what needs to be done and pushing ahead through trial and error will pave the way for earning power and growth for tomorrow. Focusing on realizing results in a timely manner, take on challenges boldly and implement actions so that we can achieve our FY2026 earnings targets and deliver significant results in the final year.

This Year, We will tirelessly work toward regaining our earning power.

Under our Seventh Business Plan (FY2021–2024), we completed structural reforms and strengthened sales. The result was a consolidated profit of ¥135 billion (four-year average, excluding inventory and valuation differences). However, from the second half of FY2024, the business environment deteriorated sharply. China greatly increased its exports of low-priced steel, causing market prices to slump in Japan and overseas. Protectionist trade policies, including the Trump tariffs, further aggravated the situation.

Although the major disruptions have subsided, the outlook for a recovery in demand and market prices is not optimistic. It would be risky to assume that the present situation is temporary, like the Lehman Brothers collapse or the COVID-19 pandemic. We are in a very difficult situation with respect to earnings. In order to pull through and build strength, we must achieve the goals of our Business Plan and realize our Long-term Vision focused on 2035. For these reasons, we must relentlessly restore our earning power this year. Please approach the remainder of FY2025 and all of FY2026 with determination.

To Everyone involved in Sales

First, strengthen our sales strategy and practices so customers recognize the value of our products, by expanding sales of high-value-added products, maintaining and widening spreads, selling GX Steel * , and more.

Focus on maximizing our revenue. After banking a Kurashiki District blast furnace, our production capacity now reflects actual demand. In addition to carefully monitoring production capacity, actual orders, market changes and customers. please remain more aware than ever of what, when and how to sell, including commodity products, to maximize our revenue. This is the principal mission of sales, and we must commit to it fully right now. I am counting on you.

(*The name was changed from “green steel” to “GX Steel” following the revised guidelines by the Japan Iron and Steel Federation.

To Everyone involved in Production

First, safe and stable operation bring stability to the entire production floor in terms of not only production volume and efficiency, but also cost, quality, delivery and the prevention of accident and injuries. This would allow us to dedicate more time to creative activities, both thinking about them and deploying more manpower for implementation. We must make a united and positive effort to ensure safe and stable operations.

Next, Cost management. As a manufacturing company, our earnings depend crucially on cost management on the production floor, as well as on the management of procurement and outsourcing. To regain our earning power, push ahead with cost reductions and use limited resources in the most effective way possible by strictly deciding where and how to spend money and use what we have (people, materials, money, time, information and intellectual property). If you are involved in production or related operations, seek the cooperation of research laboratories, administrative departments, and Group companies and contractors.

To Everyone involved in Research and Growth Fields

We are engaged in growth fields, including research and development, capital and business investment, overseas business and solutions businesses overseas, carbon neutrality, and DX strategies. Although the business environment outlook is uncertain, we will not stop taking steps toward future growth. We will elaborate our strategy in detail, and if we believe that now is the right time, we will steadily make decisions and implement our plans.

The journey from taking on a new challenge to achieving results can be a difficult one, but the sense of fulfillment we experience once we achieve our goal makes every effort worthwhile. Let us continue to take on challenges and pursue growth so that we can achieve the future we all dream of.

Work on DX on Business Processes. The Tools Are Right in Front of You.

If we implement DX ahead of other companies, it could dramatically enhance our competitive advantage. This is one of the growth strategies that the company as a whole wants to vigorously promote, and it is an opportunity now.

Until now, we have focused on production processes, and we have achieved certain results such as production efficiency, and selling externally. While our introduction of certain DX tools, including generative AI, has improved staff operations and other business processes, I believe our use of these tools has been uneven and inconsistent. We want all departments to use DX tools to streamline and enhance operations in order to reduce costs and expand earnings. The company will support your efforts by introducing new structures.

Putting Our Values into Practice

Do you remember our Purpose, Vision, and Values? When work becomes busy, we tend to focus on immediate and urgent issues, forgetting our medium-　to long-term direction. However, in such times, it is even more important to reaffirm the direction expressed in our Purpose (which defines the raison d'etre of our company),our Vision (which defines medium- and long-term goals), and our Values.

As you set your goals for the new year, first try setting a specific goal based on any one of our six Values. Putting our Values into practice facilitates change and growth. I also believe it will bring new motivation and fulfillment to your work and life. The company will actively support those seeking change and growth. Let's show everyone, internally and externally, how our company and employees are growing together.

“There is absolutely no benefit” from violating the law, taking unwise shortcuts, or misconduct

Compliance is absolutely essential for our corporate activities. Legal violations and misconduct, such as falsifying numbers or documents, are unacceptable, even if someone thinks they are acting in the company’s best interests. Such actions inevitably lead to a loss of public trust and cause enormous damage. Our future can only be built on compliance and honesty. Rather than pursuing temporary gains through misconduct, our mission is to create sustainable value that society can trust. Even though I have said this many times before, it's important for you to consider it once again.

In closing

Finally, the cooperation of our labor union is indispensable if we are to overcome the current environment. The union listens carefully to employees and engages in constructive dialogue with management. Let us build on our well-established labor–management relationship to tackle challenges together and pursue our shared vision for the future. This concludes my remarks at the beginning of the New Year. I wish you and your family a fruitful, healthy and satisfying year in 2026.