Sumitomo Metals to Hike Steel Piles and Bridge Plate by 10-15%

Sumitomo Metal Industries started negotiation with users to increase the selling price of steel pipe pile, sheet pile and plate for bridge by 10-15% for February order from January. The firm tries to improve the profitability through around 10,000 yen per tonne of hike. The firm decided the hike to improve the profitability when the raw materials cost will increase in fiscal 2007 starting April 2007 from fiscal 2006 after the continuous rising in years under decrease of civil works in years. The firm tried to absorb the higher cost when the users of civil work contractors get lower order receipt. The firm improved the profitability for building steel materials under strong demand for private sector while civil work demand decreases. The firm also enjoys favorable market condition in plat for shipbuilding and energy under tight supply. The firm tries to keep the stable supply for civil works through the price hike when the firm expects the favorable market condition will continue in fiscal 2007. The firm expects the demand is 520,000-540,000 tonnes each for steel pipe pile, sheet pile and bridge plate in fiscal 2006 compared with the peak of around 990,000 tonnes for steel pipe pile in 1995, around 900,000 tonnes for sheet pile in 1991 and around 800,000 tonnes for bridge plate in 2000. The demand keeps decreasing in years.