Sumitomo Metals to Seek Shipbuilding Plate Hike in October

Sumitomo Metal Industries decided to increase the contract plate price by more than 3,000 yen per tonne for domestic shipbuilders for October shipment. The firm decided the additional hike to improve the lower price than international level under tight supply after the 2,000 yen hike for January-March. The firm starts negotiation soon with the users. The firm also tries to improve the extra charge in fiscal 2007 starting April. The shipbuilding plate price increased by more than 20,000 yen per tonne from 2003 after the hikes for 4 years in a row. However, the price level is still lower than export price when Japanese integrated steel makers increase export price by around US$ 20 to US$ 620-630 per tonne for South Korean shipbuilders for April-September shipment. Japanese shipbuilding volume was record 18.1 million gross ton in 2006, according to Shipbuilders’ Association of Japan. The shipbuilders keep around 56.93 million gross ton of order backlog, which represent more than 3 years of building volume. The order receipt is expected to keep firm in and after fiscal 2007. Japanese shipbuilders resisted steel price hike due to loss making operations when they were working for low priced orders. However, the shipbuilders are shifting to higher priced order and many of them are expected to regain profitability in fiscal 2007. Sumitomo Metals tries to increase the plate price when the users can accept higher price.