News Room - Steel Industry

Posted on 19 Jun 2008

Nippon Steel may raise plate price by 40%

Nippon Steel Corp, the world's second-biggest maker of the metal, will raise contract prices of steel plate for domestic shipbuilders about 40% to a record, steel traders said.

Steel plate will increase by 30,000 yen (US$278) a tonne by Sept 30, said the traders, who asked not to be identified because negotiations are confidential.

Nippon Steel, which forecasts a 41% drop in annual profit, needs to raise prices to help offset a tripling of costs.

for coking coal and a surge of at least 65% in the price of iron ore. Rising metal costs may force some car and shipbuilders, among the Tokyo-based steelmakers biggest customers, to reduce planned increases in production as global growth slows.

“For Nippon Steel, there has been some doubt about whether most of its customers would be able to accept price increases,'' said Yuuki Sakurai, general manager of financial and investment planning in Tokyo at Fukoku Mutual Life Insurance Co.

“Shipbuilders and automakers may try to decrease their production and may try to buy somewhat less steel.''

The company in April said it would raise immediate-delivery prices for plate, used to make machinery and ships, by about 10% to 110,000 yen a tonne as of this month.

That gain followed a 20,000 yen increase in April for the company's network of wholesalers.