Japanese integrated steel makers could offer more than 15,000 yen per tonne of price hike for plate to domestic shipbuilders for fiscal 2008 starting April. The steel makers try to increase the relative lower price than international level despite of higher cost for raw materials while they could face major cost increase for iron ore and coking coal for fiscal 2007. They could offer wider hike depending on raw materials price for fiscal 2008. Plate supply is very tight with strong demand for shipbuilding, energy industry and construction machinery. Japanese shipbuilders got 9.81 million compensated gross ton of new order in January-November 2007, which was around 12% higher than same period of 2006. They have 3-4 years of order backlog and expect strong order condition in fiscal 2008. Their carbon steel purchase volume is expected to around 4.4 million tonnes in fiscal 2008, which is 4-5% higher than fiscal 2007, according to Shipbuilders’ Association of Japan. Japanese steel makers cannot meet the strong demand and some delivery is delay despite of the full capacity operation. Japanese steel makers succeeded to increase the shipbuilding plate price to around 65,000 yen per tonne for domestic shipbuilders after total 20,000 yen hike since 2003. However, the steel makers consider the price is still low level when shipbuilders’ profitability improves. Chinese steel makers increased the shipbuilding plate price to around US$ 900 per tonne for South Korean shipbuilders. Japanese steel makers also try to increase the price for shipbuilders in South Korea. The higher international price increases the gap with lower price for Japanese shipbuilders.
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