JFE Steel Requests Plate Price Hike to Shipbuilders

JFE Steel, Japanese major steel maker, requested additional price hike by 10,000 yen per tonne for steel plate and shaped steel toward domestic shipbuilders. JFE Steel will raise the selling price for November rolling order receptions when the international steel plate price is higher than domestic price. JFE Steel has advanced the price negotiations since mid October. The firm raised the plate price by total 30,000 yen for April-June and July-September. The upsurge range will total 40,000 yen per tonne including the latest hike in November.

Shipbuilders are expected to resist strongly against JFE Steel’s price hike when the firm’s plate price becomes over 100,000 yen per tonne. A source of JFE Steel said it is necessary to raise the selling price to keep stable production volume when the supply is tight and the plate price for domestic shipbuilders is lower by 30,000-40,000 yen than the export price.

The supply keeps tight situation. A half of the plate shipment as JFE Steel is for shipbuilding. The firm is sustaining the supply volume for shipbuilding by delivery date adjustment for 7-10 days.

On the other hand, the demand is unclear in near future. Construction machine output is decreasing due to global economy downturn by the impact of financial crisis. New business negotiation for shipbuilding is stagnant.

JFE Steel already raised the plate price by 10,000 yen per tonne for dealers in September. The firm is also in price hike negotiation by 10,000 yen with construction machinery makers except for shipbuilders.