Japan Steels Get Higher Contract Price for Special Steel Bar, Wire Rod

Japanese integrated steel makers are getting higher price for contract price of special steel bar and wire rod for April shipment. The steel makers agreed with some of contract users to increase the steel price with potential additional price hike depending on raw materials cost. The users apparently accepted the higher price to secure stable supply. The steel makers still keep negotiating with automakers and machinery makers to increase the price by 20,000-25,000 yen per tonne. Special steel bar and wire rod is used for power train and suspension parts of automobile and construction machinery. Japanese automakers increase the output including knockdown sets to meet higher demand while construction machinery makers expand the output capacity under strong offshore demand. The special steel bar and wire rod demand increased by 4% to 11.12 million tonnes in 2007 from 2006. The makers try to meet the higher demand by operating the lines at full capacity. However, the supply is tight and is expected to get tighter due to limited availability of steel source. The bar and wire rod makers try to stabilize the supply by getting higher price to cover extremely higher cost for iron ore, coal, ferrous scrap and freight.