JFE Steel to Hike Special Steel Bar, Rod, Square Bar by 20,000 yen/t

JFE Steel announced on Tuesday the firm increases the selling price of special steel bar, wire rod and square steel by around 20% or 20,000 yen per tonne for February order or April shipment. The firm increases the price for all users including domestic contract users, distributors and offshore buyers while the firm improves the extra charge by around 10,000 yen for heat treatment and wire drawing processes. The firm tries to improve the profitability to keep stable supply under strong demand and potential wide cost increase for raw materials. Japanese special steel bar and wire rod output is expected to hit record more than 11 million tonnes in fiscal 2007 ending March 2008 and the supply is likely to get tighter with higher demand for automobile and machinery in fiscal 2008. JFE Steel expanded the output capacity by around 30% at Kurashiki area of West Japan works in fiscal 2007. However, the firm cannot meet the strong demand and cuts more than 10% of the potential order. The firm decided the hike when the price is 20-30% higher in Europe and USA than Japan and raw materials cost would jumps for iron ore and coking coal. The firm could increase the price additionally depending on the raw materials cost for fiscal 2008.