Kobe Steel to Hike Aluminium and Copper Rolled Products

Kobe Steel will seek higher price for aluminium flat rolled and extrusion products and rolled copper strip and sheet in half year to March 2007 to cover higher cost for crude oil and production loss in casting process. Senior managing director Hiroyuki Nakayama, who is president of aluminium and copper company of Kobe Steel, said the firm needs 17 yen per kilogram higher rolling margin for aluminium flat products, 20-30 yen for aluminium extrusion and around 30 yen for copper strip and sheet to make money though the firm is still study how wide the firm seeks. The firm considers asking the customers, who provide material ingot, to provide more ingot to cover production loss. Mr. Nakayama said the aluminium and copper company’s profit outlook is more than the actual profitability when the inventory value increased under surging ingot market price. He said the copper strip and sheet business is breakeven or even makes loss when higher copper ingot price expands production loss damage. The firm said the aluminium and copper company’s cost will increase by 8.6-8.7 billion yen for the year, which includes 3.5 billion yen of production loss, 700-800 million yen of higher subsidiary raw materials and 4.4 billion yen for higher crude oil. The firm estimates aluminium flat products’ cost increases by 5.4 billion yen for the year while the aluminium extrusion’s cost increases by 0.9-1 billion yen including 300 million yen for production loss, 400 million yen for higher energy cost and 200-300 million yen for higher subsidiary materials cost. The firm tries to increase the extrusion selling price by 30 yen per kg mainly for high strength alloy containing more surging metals including copper and zinc. The firm also passes the higher cost for copper strip and sheet when the cost increases by 2.3 billion yen including 1.9 billion yen for production loss and 400 million yen for higher energy cost. The firm rolls many aluminium products with ingot supplied by the customers as can materials. The firm could ask the customers to provide 3% more ingot when the casting process makes around 3% loss.