Japan Automakers Indicate to Accept Certain Steel Hike for F2008

Top officials of Japanese automakers indicated they could accept certain price hike for steel products to reflect economic principle and supply balance. Japanese major steel makers prepare to increase automotive steel price for fiscal 2008 starting April depending on the raw materials cost for iron ore, coking coal and other materials. Some steel industry sources indicate the price hike could be much more than 10,000 yen per tonne after around total 20,000 yen of sheet hike since fiscal 2003. Vice president Akio Toyoda of Toyota Motor said at New Year party of automobile industry on Monday material price could increase to reflect economic fundamentals. He said the firm will try to cover the higher cost by reducing cost and by improving material usage. COO Toshiyuki Shiga of Nissan Motor said the users have no choice but to accept certain price increase of materials depending on market mechanism and supply balance. However, Mr. Toyoda and Mr. Shiga concern materials and minerals price increase could be part of due to artificial intention and indicate the users could shift from materials with limited availability to resource rich materials. Chairman Hajime Bada of Japan Iron and Steel Federation said the industry faces major cost up for raw materials, energy and freight much more than cost cut and efficiency improvement effort. The president of JFE Steel said Japanese steel industry’s those cost increases around 900 billion yen for fiscal 2007 ending March 2008 compared with fiscal 2006 and the cumulative cost up reaches around 3.6 trillion yen since fiscal 2003.