VVF Cable Makers Appeal Price Hike around Osaka

Electric cable makers around Osaka are appealing price hike for VVF cable (vinyl insulated vinyl sheathed flat-type cable). One middle-class maker already started the announcement this month to pass high material costs for copper and vinyl chloride. VVF cable makers are suffered from worse profitability due to the low demand and high material cost. They aim to raise the market price.

Around Osaka, one maker announces VVF cable price hike effective for December while another maker explains they already raised the selling price in November. The latter maker says the market price is expected to lower in December when electrical wholesalers and cable dealers enter price negotiations for year-end and new-year demand season.

Electrical wholesalers’ spot purchasing price is around 29-30 yen per meter for 2-core VVF cable with 1.6 millimeters diameter. The market price is significantly lower than VVF cable makers’ suggestion at 34-35 yen.

Domestic electrolytic copper price stays at around 600,000 yen per tonne since August 2009. Meanwhile, current VVF cable market price is at the level as low as copper price at 500,000 yen.

As to vinyl chloride, naphtha price, the market indicator, surged by 7,900 yen to 41,200 yen per barrel for October-December from the previous quarter. Naphtha price is expected to continue upsurge for January-March. Compound makers are offering additional price hike against electric cable makers after the previous hike in this summer.

Domestic new housing starts maintain very low. VVF cables are mainly used in houses and condominiums. Electrical contractors’ VVF cable procurement is inactive. Electrical wholesalers seem to hold surplus VVF cable inventories. Price hike may be difficult with low demand.