22 April 2010
Tokyo Steel to Raise Prices for Fourth Month on Costs

Tokyo Steel Manufacturing Co., Japan's largest electric furnace mill, will raise steel prices by as much as 9.9 percent for the fourth straight monthly increase as material costs climb.

The prices of all products, including construction beams and hot coils, will be increased for May contracts by between 3,000 yen ($32.6) a metric ton and 7,000 yen, Managing Director Naoto Ohori told reporters today in Tokyo, where the company is based. The steelmaker is also exporting automotive steel to China and Thailand to tap demand in Asia, he said today.

Asian steelmakers are raising prices to pass on increased raw material costs, including coking coal, to their customers. The price of scrap steel, a key purchase for electric furnace mills such as Tokyo Steel, is also climbing.

"It's becoming clear that production costs will go up significantly, as demand for steelmaking ingredients persists due to a global demand recovery of steel products," Ohori said.

The price of H-beams, used in construction, will be raised 6.8 percent, or 5,000 yen a ton, to 79,000 yen and hot coils by 5.9 percent, or 4,000 yen, to 72,000 yen. Steel plates will rise 4,000 yen, or 5.6 percent, to 76,000 yen, Tokyo Steel said.

Tokyo Steel is exporting about 1,500 tons of steel samples for Chinese auto-parts makers, and it has had inquiries from a Thai parts maker for 5,000 tons, Ohori said, without identifying the producers.

Tokyo Steel shares rose as much as 4.1 percent to 1,233 yen, and traded at 1,206 yen as of 12:45 p.m. on the Tokyo Stock Exchange. The stock has gained 15 percent this year.

Brazil's Vale SA, the largest iron ore supplier, last month broke a 40-year custom of selling products at fixed annual contracts and won a 90 percent price increase from Japanese mills for a three month agreement that started on April 1.

(Source: SEAISI Website)

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