Nippon Steel to Hike Special Steel Bar by 10,000 yen/t

Nippon Steel will increase the selling price of special steel bar and bar in coil by 10,000 yen per tonne for April. The first base price hike in 2 years is to increase the price of mechanical structural steel bar, bearing steel bar, spring steel bar and bar in coil for cold heading and cold finishing both for contract users and distributors. Iron ore purchase price increases by 9.5% for fiscal 2007 starting April from fiscal 2006 under tight supply of raw materials under growing raw steel output mainly in China. The major iron making raw materials cost for steel makers will increase for 2 years in a row when non- and soft-coking coal price is expected to increase despite of slight loose supply for hard coking coal. Ferrous scrap price increased by 10,000 yen per tonne in a year and the price keeps high for nickel, molybdenum, vanadium and chrome. Japanese special steel bar and bar in coil price is lower for the quality than the products in USA and Europe. The Japanese price is estimated to be more than 20% lower in current exchange rate than European price. The profitability for Japanese steels is lower than other products. The demand for special steel bar and wire rod is strong and the supply is expected to keep tight in and after fiscal 2007. Nippon Steel decided the hike to keep the stable supply with better profitability and to cover research and development cost for better technology.