Kobe Steel to Hike Steel Wire Rod and Bar by 10-15%

Kobe Steel announced on Monday the firm increases the base selling price of steel wire rod and bar by 10-15% for all applications for April shipment, which represents around 10,000 yen per tonne of hike. The base price hike is the first attempt after 15,000-20,000 yen per tonne of hike for April 2005. The firm introduces surcharge price mechanism for items with nickel content in April while the firm keeps seeking revised extra charge introduced before. The firm tries to improve the profitability to keep stable supply under firm demand for high valued items. Special steel wire rod and bar demand is expected to expand in and after fiscal 2007 from current record level. The firm said the price level is less than appropriate level for capital expenditure and technology development. The firm also said the raw materials cost increases for iron ore, coal, alloys and freight. The firm said Japanese price level of steel wire rod and bar is lower than international level and 20-30% lower than European price. The firm decided the hike and started the notice to users when the firm expects with the hike, Japanese users can keep international competitiveness.The firm decided to start surcharge mechanism for items with nickel content including spring steel and nickel-chrome-molybdenum steel in April to cover surging nickel price though the firm tried to pass the higher cost price through several times of revision of extra charge since April 2006. The firm already introduced surcharge mechanism fro some items since 2005 to reflect price change of molybdenum and vanadium. The firm started negotiation with users to seek higher extra charges for wire rod for cold heading, bearing steel, heat treated items, special composition items and smaller sized bar. The firm tries to seek higher extra to reflect the value and functions.