JFE Steel Seeks 10,000 yen/t Hike for Contract Plate Price

JFE Steel started the negotiation to increase plate contract price for the major users including shipbuilders and makers of heavy electric machinery, construction and industrial machinery. The firm tries to realize around 15% or 10,000 yen per tonne hike for October-March under tight supply to cover higher cost for raw materials and to fill the gap with international price level. The firm tries to increase the shipbuilding plate price for 5 years in a row while the price hike is the first time for heavy electric machinery and construction and industrial machinery since fiscal 2004 ended March 2005. The demand is strong for manufacturers when shipbuilders and machinery makers increase the export. JFE Steel increased the output by around 10% in January-June from same period of 2006. However, the firm cannot meet the strong demand and expects the supply gets tighter. The firm seeks higher price to keep the stable supply when some plate domestic price is more than 20,000 yen per tonne lower than price in South Korea. JFE Steel expects the cost of raw materials including iron ore increases by 90 billion yen for fiscal 2007 ending March 2008 compared with fiscal 2006. The firm anticipates the cost could increase more in fiscal 2008. The firm indicates additional hike to cover higher raw materials cost even after the hike.