Kobe Steel to Improve Steel Contract Prices

Kobe Steel will ship 6.5 million tonnes of steel products in fiscal 2006 as the level in fiscal 2005 while the raw steel output will increase to build inventory for blast furnace relining in 2007 compared with 7.56 million tonnes in fiscal 2005. The executive vice president Toshio Kimura of Kobe Steel expects the steel demand including export will keep the level as last year when finished automobile output will reach annual 11 million units and shipbuilding output is annual 16-17 million gross ton. He said the firm tries to improve the contract price including extra charge for automobile to realize appropriate price system for the products’ value when the raw materials price increased for iron ore and zinc. Mr. Kimura said the firm already started extra charge improvement for special steel bar and wire rod for automobile while the firm still studies for automotive flat steel. He said the firm tries to increase the shipbuilding plat for second half of fiscal 2006 as a part of effort in past 3 years with consideration for shipbuilding price level. He said the firm also tries to improve the export price level for offshore plants of Japanese manufacturers to meet the products value. Kobe Steel targets the firm will increase the original products by 650,000 tonnes to 3 million tonnes, which represents 40% of total sales, in fiscal 2008 from fiscal 2005. Mr. Kimura said the original products could increase more and the firm tries to improve the supply ability of the high valued products.