POSCO to Raise Steel Product Prices in May to Reflect Material Cost Increase

POSCO of South Korea announced on Friday the firm raises the selling price of steel products effective for order on and after May 3. Hot rolled steel sheet price will be raised by 170,000 won or 25% to 850,000 won per tonne (US$ 766 or 71,500 yen per tonne). The firm will raise the price by 180,000 won for cold rolled steel sheet and hot dip galvanized steel sheet while raise by 80,000 won for steel plate. The range of hike is different considering the market conditions. POSCO reflects the cost upsurge of iron ore and coal on the selling price.

The previous price revision was in May 2009 and the previous hike was in July 2008. POSCO may change the selling price every quarter if raw material prices become to be revised every quarter.

POSCO’s selling price will surge to 965,000 won per tonne for cold rolled steel sheet and 1.065 million won for hot dip galvanized steel sheet. Demand of the both products keeps steady. Meanwhile, steel plate price will increase by 80,000 won to 900,000 won when shipbuilders, the major plate consumers, are suffered from stagnant order receipts.

Steel wire rod price will increase by 170,000 won to 890,000 won per tonne. Slab price will surge by 80,000 won to 730,000 won per tonne. As to pig iron for casting products, the selling price will increase by 150,000 won to 700,000 won per tonne and the price hike will become effective on June 3, considering the impact on middle- and small-size casting manufacturers.

Offshore raw material suppliers are offering the price hike of iron ore and coal by 90-100% for a new fiscal year. This cost increase results in the price up of steel products by 190,000-210,000 won per tonne. POSCO tries to reduce production costs by 1.1 trillion won per year while request the price hike to the customers.