Sumitomo Light Metal to Raise Rolling Charges for Aluminium Products

Sumitomo Light Metal Industries considers the hike in rolling charges for its aluminium rolled products during the half year to March 2007 when the firm is suffered from the costs expansion due to the price surge of crude oil and sub materials. Kazuhiko Masuda, president of Sumitomo Light Metal, pointed out the firm would need to raise the rolling charges by average 10% during the half year from the present, when the firm cannot absorb the cost increases only inside the group any further. The firm now examines actual timing and markup of the hike.Sumitomo Light Metal has advanced the cost reduction inside the group so far, such as energy shift to liquefied natural gas and cogeneration. However, the costs for rolling-mill lubricant and other sub materials escalated due to the surge of crude oil price. The firm estimates the total cost increase at above 2 billion yen per year. Including the impact by the higher prices of additive metals such as copper and zinc, the total cost expansion would reach 5 billion yen per year. The firm is also suffered from productive losses in aluminium rolling processes when primary aluminium price stays high. Mr. Masuda said the recent costs up cannot be covered only by the firm’s cost cut efforts.Sumitomo Light Metal will seek the rolling charge hike for all the aluminium products including those for market dealers and for large contract users such as can materials. The firm aims to improve the margins and profitability for its all products, while the timing of the hike might differ by the customers.