Some Japan Steels Get 10,000 yen/t Hike for Auto-Special Steel Bar and Wire

Some Japanese integrated steel and special steel makers concluded the price hike negotiation for special steel bar and wire with automakers, according to sources. Some of them got around 10,000 yen per tonne of hike though the individual negotiation is confidential for increase value and period. They apparently increase the price for July for the first time in 2 years since spring of 2005. The steels increased the price for 3 years in a row through fiscal 2005 ended March 2006. They sought another hike for fiscal 2006 to cover higher cost for ferrous scrap, subsidiary materials and nickel. However, the automakers rejected the attempt. The supply gets tighter after fiscal 2006 when automobile output keeps increasing including knockdown sets. The steel suppliers are suffered from higher cost for ferrous scrap and nickel. The steels tried to increase the contact price for fiscal 2007 to keep stable supply with better profitability. The automakers apparently compromised to secure the materials from domestic suppliers when the offshore suppliers cannot make the high grade products. The steels and automakers keep negotiating for sheet contract price focusing on gap with international prices and higher cost for raw materials.