Kobe Steel to Hike Aluminium and Copper Products Prices

Kobe Steel will increase the selling price by averaged 10% for light metal flat and extrusion products and by 15% for copper strip and flat products for January order. Mr. Hiroyuki Nakayama, president of the aluminium and copper unit, said the firm needs higher selling price to improve the profitability when the operating profit could decrease by more than 10 billion yen with lower metal prices cost under higher cost for material metals and casting loss though the first half results were good due to inventory valuation gain under higher metals price. The firm tries to shift to metal price linked price mechanism for aluminium foil products, part of which the subsidiary, Sun Aluminium Industries cannot cover higher metals price for. The aluminium and copper unit posted record level of consolidated operating profit at 18 billion yen of for the half year to September. The unit expects the full year profit will reach 31 billion yen. However, the actual profit for the full year could be lower than previous year without inventory valuation gain including 12 billion yen for the parent company and 2 billion yen for Kobelco & Materials Copper Tube. Mr. Nakayama said the production cost increases under high level of crude oil price and increasing prices for subsidiary materials. Especially the copper casting loss hit 2.3 billion yen for the first half year. With the severe condition, the firm seeks higher price to cover around 3% casting loss for copper products while the firm tries to increase the selling price of aluminium products by around 20 yen per kilogram to cover higher cost. The aluminium and copper unit also tries to reduce the inventory for material in process to reduce cost. The unit already reduced the inventory by 11,000 tonnes or around 4 billion yen for aluminium and copper.