News Room - Steel Industry

Posted on 24 Jun 2010

JFE says can pass materials costs on to customers

JFE Steel Corp will be able to pass most of higher costs for raw materials on to customers in the April-June quarter, President Eiji Hayashida said on Tuesday.

Worries that Japanese mills will not be able to fully pass higher iron ore and coal costs on to customers like Toyota Motor Corp have battered their shares.

 

Shares in JFE Holdings, the world's sixth-biggest steelmaker rose 0.7 percent to an intraday high of 3,010 yen after the news, outperforming a 1 percent decline in the broader market.

 

"Generally speaking, we'll be able to pass most of the higher raw material costs on to our customers in almost every sector dating back to April," Hayashida told a news conference.

 

Hayashida, also the chairman of the Iron and Steel Federation of Japan, said higher raw material prices will cost Japan's steel industry 2 trillion yen ($22 billion) in the year through March 31 if iron ore and coking coal prices stay at current levels after October.

 

Hayashida also said an appreciation in the China's yuan would not have a large impact if it was gradual.

 

"A gradual rise in the value of the yuan is positive if it helps expand China's domestic demand, curtails exports and leads to healthy growth in the steel market," he said.