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Some Kobe Steel products facing China customs delays - Shinsho president

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Some Kobe Steel products facing China customs delays - Shinsho president

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By Yuka Obayashi TOKYO (Reuters) – Kobe Steel Ltd’s <5406.T> trading unit said on Tuesday it has experienced delays getting products from the embattled Japanese steelmaker through Chinese customs because of a data fabrication scandal that has rocked global supply chains. Shinsho Corp <8075.T>, which sold some Kobe Steel products with tampered specifications, has been hit with delays on some shipments as Chinese custom officials sought more information, President Takafumi Morichi told an earnings news conference. While Morichi said products were cleared after delays, the move by Chinese customs is another hitch for Kobe Steel as it tries get to the bottom of widespread data tampering on products used globally in cars, trains, aircraft and nuclear plants. The company has not received any cancellations from its customers, but it sees some risk of an impact on its business, including having some customers switching suppliers, Morichi said. Kobe Steel is the subject of a U.S. Justice Department inquiry and has lost customers as a result of the scandal. Its shares have fallen more than 30 percent since it revealed the fabrication earlier this month. They rose 3.3 percent on Tuesday, while the Nikkei 225 <.225> ended unchanged. The revelations have sent companies in global supply chains scrambling to check whether the safety or performance of their products has been compromised. Japan’s third-largest steelmaker on Monday pulled its forecast for a first annual profit in three years as it tries to deal with the financial impact of one of Japan’s biggest corporate scandals. On Friday it had a government-sanctioned seal of quality revoked on some of its products. While no safety issues have been identified, Kobe Steel’s parts and materials are used across the world.

(Reporting by Yuka Obayashi; Writing by Aaron Sheldrick; Editing by Christian Schmollinger and Jacqueline Wong)
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