Japan Major Steels Hike 15,000 yen/t Sheet Quarter Price for OA Maker

Japanese integrated steel makers apparently won 15,000 yen per tonne of sheet contract price hike for Japanese major office automation equipment maker for April-June from annual price in fiscal 2009 ended March 2010. The price increases for the first time in 2 years. The buyer accepted the wide hike to secure the material when cost of iron ore and coking coal increased widely. The steel makers are apparently finalizing price negotiation with automakers to change the annual term into half year based pricing.

The supply of electrogalvanizing steel and sheet steel is tight due to higher demand at home under stimulus package and in China and emerging country. The sheet steel buyer secures the material at higher price to increase the production. The buyer decided to increase parts steel supply price from OA maker to parts makers and notified the week the suppliers of the higher price, which is the base of parts price.

The integrated steel makers seek around 10,000 yen per tonne of sheet steel hike for July-September from April-June under ongoing negotiation.

The steel makers try to reorganize the pricing term into quarterly price from traditional annual price when iron ore and coking coal suppliers changed the annual contract price system into quarterly based pricing. Many automakers and appliances makers still resist the quarterly steel pricing due to unstable cost. However, the major OA makers’ acceptance of quarterly pricing as well as wide hike could impact on the negotiation with other major steel buyers.