Japan Major Steels to Seek Higher Contract Steel Price in 1H F2012

Japanese integrated steel makers will start price negotiation with contract users including automakers, appliances makers and shipbuilders for April-September shipment. The steel makers try to realize higher price to improve the profitability while the users seek major price cut under lower iron making raw materials cost and wider steel price gap with offshore market.

The steel makers reduced the contract steel price in second half of fiscal 2011 ended March 2012 more than reduction of raw materials cost due to lower offshore steel market price and higher import volume under historical high yen rate.

The negotiation would be key factor for steel makers’ profitability in fiscal 2012. The steel demand is slow except for automobile while yen rate is still high in historical view. The makers try to improve the margin by realizing higher contract price despite of strong resistance by the users.