Sumitomo Metals to Raise Seamless Steel Tube Price by 15% in April

Sumitomo Metal Industries announced on Friday the firm raises selling price of seamless steel tube by 15% to domestic market, except for stainless steel tube, effective for April production. The firm started price hike announcement to all domestic users including wholesalers and large-lot end-users when iron ore and coking coal prices are expected to surge largely in and after April. The firm also eyes price hike for welded steel tube as well as price scheme change to quarter by quarter.

Spot iron ore and coking coal prices have increased rapidly since December due to flood damage in Australia. Contracted iron ore price is expected to increase by around 30% to historically high US$ 170-180 per tonne for April-June from January-March between Japanese steel makers and offshore raw material suppliers. Meanwhile, BHP Billion is requiring price scheme change to one month contract or contract by each transport ship against conventional quarterly contract.

Market demand for seamless steel tube is expected to represent steady in fiscal 2011. The demand maintains favorable from offshore energy industry while recovers from domestic construction machine or industrial machine makers. Sumitomo Metals forecasts the supply and demand keeps balance. However, tube users may show disapprovals against the hike when the users are impacted by rising crude oil price or economic recovery is weak in rural areas.