JFE Steel to Hike Galvanizing Piping Pipe Price by 10%

JFE Steel decided to increase the selling price of galvanizing piping steel pipe for July order, which is rolled in August and shipped in September, to cover surging zinc cost. The firm increases the price by around 10% both for distributors and contract users. The move, which is only for galvanizing products, is the first price hike of piping pipe for the firm since April 2005. The firm increases the selling price for galvanizing products including piping carbon steel pipe, water piping galvanizing pipe, carbon steel pipe for pressure service, water piping galvanizing unplasticized polyvinyl chloride lining steel pipe, water piping galvanizing polyethylene powder lining steel pipe and fire fighting unplasticized polyvinyl chloride lining steel pipe. Zinc price has increased since April 2003 and surges after autumn 2005. Japanese official zinc ingot price reached 439,000 yen per tonne in April 2006, which was 3.3 times of 133,600 yen in April 2003. JFE Steel integrated the galvanizing plating process into Galvatex Corporation after the firm terminated the operation at JFE Tubic in September 2004. The firm decided to hike the price when the firm cannot absorb the cost by own effort despite of the cost cutting activities. Japanese piping steel pipe order receipt is just more than 300,000 tonnes per year, which is around 30% lower than the peak and has kept decreasing. Galvanizing pipe represents the largest maker, JFE Steel’s piping pipe production. The firm tries to cover higher zinc cost for the galvanizing products. The firm will reduce output of piping steel pipe mainly for galvanizing products by 10% for July-September from April-June to reduce distributors’ inventory and to support price hike. The firm already reduced the output by 5-10% in April-June from same period of 2005.