Hard Price Negotiation Continues between Japanese Steel Makers and Users

Hard price negotiations continue between Japanese integrated steel makers and major steel users such as automobile and electric appliance makers. Steel makers request the price hike by 15,000-20,000 yen per tonne for April-June and the contract term change from conventional a year to a quarter. Most steel users are showing strong disapprovals while some users are accepting the hike when raw material prices are likely to surge more for July-September.

Panasonic, Japanese major electric appliance maker, is said to raise the material supplying price to component makers by 15,000 yen per tonne, according to officials. Some steel makers analyze Panasonic suggested a positive stance against steel makers’ price hike. Meanwhile, some steel users have accepted the price hike in order to secure enough volume of steel sheet. Supply and demand balance of steel sheet is tight due to increasing offshore steel demand and recovering domestic automobile production.

However, most steel users are resisting steel makers’ hike. Steel users’ profits haven’t recovered enough yet since domestic demand still lags. On the other hand, raw material prices are expected to rise for July-September. Spot price of iron ore to Japanese steel makers was averagely US$ 130 per tonne in March and US$ 160 in April. Japanese steel makers will try to raise the selling price of steel sheet for July-September to reflect high material costs.