Hitachi Cable Seeks Higher Roll Margin for Rolled Copper Products

Hitachi Cable tries to increase the rolling margin for rolled copper products. The firm has tried to increase the margin by around 5% since 2006 and the firm seeks the higher margin aggressively to cover higher cost for raw materials, oil and subsidiary materials. The firm also minimizes the fluctuation risk for ingot by setting the selling price based on ingot price in a month ago of shipment, instead of current a month ago of order receipt. The firm offered averaged near 5% hike for rolling margin in 2006 and the firm still negotiates with the users. However, the cost jumped for motor oil and packaging film while the ingot price increased to around 3 times for copper and to around 2 times for tin. The firm tries to get the higher margin to cover the higher cost when some users reject the higher margin and others accepted partial hike. The firm already has ingot linked price mechanism. However, the selling price depends on Japanese official ingot price on one month before of order receipt for around 20% of the sales volume, especially for copper strip. With the mechanism, the firm is suffered from the higher ingot price when the price keeps increasing trend. The firm tries to reduce the loss from ingot price change by revising the ingot base to one month before of delivery.