Japan’s five largest trading houses could face as much as US$13 billion in write-downs on recently acquired shale, coal and iron ore assets, according to Daiwa Securities Group Inc. (OTC: DSECF) analyst Jiro Iokibe, Bloomberg said Oct. 8.

The companies -- the biggest is Mitsubishi Corp. (OTC: MSBHY) -- have long specialized in acquiring raw materials around the globe to feed Japan’s factories. Now, some of those investments have been caught out by a slide in prices that started in 2011.

Businesses from Brazilian iron ore to Australian coal mines are struggling to break even, Iokibe said by phone in Tokyo. Write-downs will depend on managers at each company, but if they happen dividends might be cut along with share buybacks, said Iokibe, who’s covered the industry for six years.

“That’s the maximum risk of write-down for the assets,” Iokibe said, referring to the 1.43 trillion yen (US$13.2 billion) figure, which represents his estimated book value of 20 shale, coal and iron ore assets held by the five companies. Mitsui & Co., Itochu Corp., Sumitomo Corp. (OTC: SSUMY) and Marubeni Corp. (OTC: MARUY) round out the group. “These are expensive assets,” which are now worth less than their book value, he said.

Sumitomo last month gave an indication of what might be brewing when it announced 240 billion yen of expected losses on resource assets and slashed its profit forecast by 96%. The company’s shares fell the most in almost two decades on Sept. 30, the day after the announcement.

Shares in four of the five companies declined Oct. 8. Mitsubishi fell the most, with a 2% loss at 12:33 p.m. in Tokyo, compared with a 14% drop in the benchmark Topix index. Itochu was up 0.9%.

The two largest traders, Mitsubishi and Mitsui, have both gained so far this year against a 2% decline in the benchmark Topix index. Mitsui added 12%, Mitsubishi 5%. Sumitomo has lost 13%, Marubeni 6% and Itochu 2%.

While Japan’s traders steadily wrote down some assets over the last two years, the scale of Sumitomo’s, and that it was largely due to a shale oil field in the U.S. that few had considered a risk, caught investors by surprise, according to Daiwa, Nomura Holdings Inc. (NYSE: NMR) and JPMorgan Chase & Co. (NYSE: JPM).

“It’s brought out voices of anxiety over write-downs at other trading companies,” Nomura analyst Yasuhiro Narita said in an Oct. 3 report.

Narita’s report came out 48 hours after Marubeni said it agreed to sell its 40% in Canada’s Grande Cache Coal Corp., which it valued at about $1 billion in 2011, to Up Energy Development Group. The price? $1.

Among other assets at risk are Itochu’s stake in Brazil’s Namisa iron ore project and Drummond Co.’s Colombia coal venture, Narita said.

Itochu doesn’t foresee write-downs connected with the Colombia or the Namisa investments at this moment, said a company spokesman, who asked not to be named, citing company policy. Regarding shale assets in the U.S., he said Itochu is re-examining areas not yet in production and doesn’t exclude some potential for additional write-downs.

Daiwa’s Iokibe has more to add to the potential write-down list, focusing on shale gas and oil.

They include U.S. investments by Marubeni and Mitsui into the Eagle Ford Shale. Mitsubishi’s shale gas projects in Canada carry risk as well, Iokibe said.

Marubeni is stress-testing its assets according to standard accounting principles and will respond as needed, a Tokyo-based spokeswoman said, asking not to be named in line with company policy. She declined to discuss specific investments.

Mitsui is checking for write-down trends among its assets, but currently, management doesn’t feel the need to recognize any such losses, said a Tokyo-based spokesman, also asking not to be named.

When looking at coal assets purchased since 2011, all five trading houses have “doubtful assets,” Daiwa’s Iokibe said.

In iron ore, the mines at risk of impairments are spread across Australia and Brazil, with Mitsubishi’s Jack Hills project and Sumitomo’s Mineracao Usiminas among them, he said.

Mitsubishi judges the appropriateness for write-downs based on accounting rules, the company said in an emailed response to questions, without specifying further.

A Sumitomo spokeswoman, when asked for comment, referred to CEO Kuniharu Nakamura’s statement at a Sept. 29 briefing that there was no chance of large additional write-downs to those the company already announced, as long as commodity prices don’t drop “by a lot.”

Since 2013, the five traders have already booked more than 330 billion yen in after-tax write-downs on the 20 coal, iron ore and shale assets Iokibe identified as most susceptible to impairments, according to the companies’ data and the analyst’s calculations. The traders’ investments in those assets run to more than 1.71 trillion yen or US$15 billion, Iokibe estimated.

Company management has a lot of discretion on when and by how much an asset’s value will be written down based on fluctuations in market prices, so the timing and size of impairments are hard to calculate, Iokibe said.

What is clear is that the recent flurry of write-downs might curb plans at some of the companies to raise dividends and instigate stock buybacks, he said.

“That’ll be negative for share prices.”