Kobe Steel Raises Extra Charge for Special Steel Bar & Wire Rod

Kobe Steel announced on Wednesday the firm increases some of the extra charge for special steel bar and wire rod to cover higher cost for the higher quality and function recent years. The firm charges 5,000 yen per tonne of extra of wire rod for cold heading compared with products for cold finished bar. The firm also seeks higher extra for bearing steel and small sized bar other than cold heading wire starting negotiation with automakers and other users. The firm tries to implement the higher extras in April-September. The Japanese major special steel maker has around 50% of Japanese market share of automotive wire rod for cold heading wire. Special steel supply for automobile keeps tight due to higher demand when Japanese automakers increase the output in recent years. Kobe Steel couldn’t improve the extra system though the firm increased the base price through the hikes for 3 years in a row to cover higher cost of raw materials. The firm decided to increase the extra charge to meet the selling price to the higher function for the special steel products. The firm tries to improve the extras for almost all products line including wire rod for cold heading wire, bearing steel, heat treated products, small sized bar and other products. Especially, the firm urges higher extra for wire rod for cold heading wire to cover the extra cost when the product contributes to better quality and productivity for the users while Kobe Steel has extra procedures to meet the severe quality. The firm also considers how to do with the base price depending on the ongoing negotiation for iron ore price.