Japan Steels to Settle Shipbuilding Plate Price Talk at 15,000 yen/t Cut

Japanese steel makers are concluding the price negotiation with major domestic shipbuilders for plate steel pricing for fiscal 2009 started April. Some steel makers are willing to accept around 15,000 yen per tonne of price down. The price is expected to decrease in the year while the price increased by 30,000 yen for fiscal 2008 due to extremely high raw materials cost. However, the negotiation could take longer time when the shipbuilders seek wider cut.

The steel makers succeeded the price hike for 6 years in a row since fiscal 2003. The price reached near 100,000 yen per tonne after the wide hike in fiscal 2008. The shipbuilders seek wider price down than 15,000 yen down offer by steel makers when the steel makers reduced the plate export price to around FOB US$ 700 per tonne for South Korean shipbuilders. The shipbuilders try to secure international competitive steel price for the competitiveness.

The steel makers couldn’t cover higher cost fully for fiscal 2008 through the limited price hike. The steel makers try to keep the price level at higher when the demand drops for construction and industrial machinery under worldwide slower economy.

The parties try to find the solution to fill the gap between shipbuilders and steel makers. The price could decrease step by step through the year.