Japan Major Steels Keep Automotive Flat Steel Export Price in 2H F2011

Japanese integrated steel makers are concluding automotive flat steel export price talk with transplants of Japanese automakers to keep the price for second half of fiscal 2011 ending March 2012 as the first half. The price was already set between Japanese steel and major automakers, according to Japanese sources. The price is expected to be settled at the level with other automakers.

Japanese automakers stopped and adjusted the operation mainly in Southeast Asia since October after Thai flood damage. The production cut exceeded 300,000 units. Most of the makers resumed the operation since late November. The makers try to increase the production when they recover Thai flood caused production cut and production loss caused by the major earthquake in Japan earlier the year.

Japanese steel makers got US$ 130-150 per tonne of price hike for the first half of fiscal 2011 compared with second half of fiscal 2010 when the raw materials cost hit record for iron ore and coking coal. The steel makers sought around US$ 50 hike for the second half when the raw materials cost is still high for October-December.

However, automakers required lower steel price when international steel market price decreased due to oversupply from China and South Korea. The automakers and steel makers reached compromise agreement for long term stable supply relationship when the automakers try to expand the production mainly in emerging countries.