Shock profit fall at Nippon Steel

Steel producers have been hit by rising raw material costs

Shares in Nippon Steel, the world's second biggest steel firm, plunged 7.6% after seeing quarterly profits fall.

The firm blamed higher fuel and iron ore prices for the 13% fall in profits to 86.6bn yen ($816m, £408m) in the three months to 31 December.

Analysts say the company is struggling to pass rising costs on to its customers which include some of Japan's biggest manufacturers, like Toyota.

There is also concern that the slowing Japanese economy could dent demand.

Many economists think Japan's economy is heading into recession, which would hit demand for steel, at a time when firms are already under pressure as raw materials become more expensive.

Iron ore and coal have both been rising in price and shipping costs have soared.

Chen Xianwen, deputy general director of the China Iron and Steel Association said supply of raw materials has been tight. "This year, everyone is feeling it. Baosteel, Angang, they're all tight."