Top News of 2008: Steel Material and Product Price Volatility

Japan Metal Bulletin selected 10 large topics of Japanese and world steel industry in 2008, including price volatility of materials and products, or sharp demand decline after financial crisis.

Ferrous scrap price roughly fluctuated during 2008. Electric furnace steel’s purchasing price exceeded record 70,000 yen per tonne in July and temporarily plunged to below 10,000 yen. Other materials also surged. One-year contract price of coal tripled for Apr08-Mar09 compared with the previous fiscal year while iron ore price doubled.

To reflect higher material costs, steel makers’ product price exceeded 100,000 yen per tonne in and after April. Integrated steel makers’ selling price still keeps the high level while electric furnaces are reducing their selling price.

Meanwhile, steel demand significantly weakened worldwide along the decline of automobile and other industries’ recession after financial crisis. Arcelor Mittal and other major steel makers reviewed or postponed their investment plans. World crude steel production represented the first year-on-year decrease in September in 7 years.

The other news included BHP Billiton’s resignation to acquire Rio Tinto, an equity acquisition in Brazilian Namisa mine by Japanese and South Korean steels, the launch of “COURSE50” technology development led by Japan Iron & Steel Federation to reduce CO2 emission, Mr. Muneoka’s assumption to Nippon Steel’s president and Japan & Steel Federation, and the 150th annual anniversary of modern steel making method.