Sumitomo Metals to Hike Oil Well Tubular to China

Sumitomo Metal Industries completed the oil well tubular export price with Petro China which is buying company for China National Petroleum Corporation, Chinese biggest energy company, for shipment in January-June 2008. The price was over double compared with fiscal 2004 at the ended of March 2005. Sumitomo Metals plans to raise the price for shipment in July-December when iron ore, coal and ferroalloy price is increasing. The demand for high grade oil well tubular is strong with deepening of oilfield development in China when high grade oil well tubular has superior decay resistance. High grade oil well tubular suppliers are limited. Petro China is increasing the import volume of the tubular for mainly anti-sour gas which is made by Sumitomo Metals after fiscal 2004. Oil well tubular export by Sumitomo Metals was 96,000 tonnes to China in fiscal 2004, over 70,000 tonnes in fiscal 2005, above 100,000 tonnes in fiscal 2006. The export is mainly to Petro China. The export is expected to be about 70,000 tonnes in fiscal 2007 due to inventory adjustment. The demand for oil well tubular is increasing in the world thanks to rising oil price. In China, the demand is forecasted to get well again in the last half of fiscal 2008 when inventory adjustment is progressing. Sumitomo Metals expects to increase the export volume to China in fiscal 2008 from 2007.