Sumitomo Metals Gets US$ 350 OCTG Hike from Oil Major

Sumitomo Metal Industries is concluding the export price negotiation with oil majors for seamless oil country tubular goods to increase the price by US$ 350 per tonne for long-term contract. Sumitomo Metals already won higher price hike for spot export price than the long term contract and the firm can get higher price by March 2009. With the wide hike, the firm can cover higher cost for raw materials and freight in fiscal 2008 ending March 2009. The demand of seamless tube keeps increasing at home and abroad especially for energy industry. OCTG demand is expanding when the oil price keeps high and the developers try to seek new sources. Sumitomo Metals plans 1.17 million tonnes of seamless tube sales in fiscal 2008 compared with 1.11 million tonnes in fiscal 2007. The firm cannot meet all of the orders despite of the full capacity operation for the mill while the cost jumps for iron ore, coal and other materials in fiscal 2008. Sumitomo Metals won the wide price hike for oil majors and offshore buyers when the buyers understand such tight supply and cost up.