JFE Holdings Inc., Japan’s second- largest steelmaker, is seeking to increase prices next quarter to pass on higher material costs to carmakers and other buyers.
The company plans to increase domestic contract prices by between 3,000 yen ($36) and 5,000 yen a metric ton in the period starting Jan. 1, Tsutomu Yajima, executive vice president at the company’s steel unit, told reporters today in Tokyo. It plans to raise the price of export hot-rolled coils by $100 to $750 a ton, the first increase in three quarters.
Contract prices for iron ore, used to make steel, will increase by $10 to $137 a ton in January to March quarter from the preceding quarter, Yajima said. BHP Billiton Ltd. is seeking an 8 percent increase in coking coal prices next quarter from Japanese steelmakers, the Nikkei newspaper reported today.
“We haven’t fully covered our costs and will have to ask to increase prices,” Yajima said.
JFE is in final discussion with coking coal suppliers to settle prices for the January quarter, he said, without giving a percentage increase.
The company has been seeking shorter-term contracts with customers after BHP, the world’s largest mining company, abandoned annual pricing on coking coal and iron ore this year in favor of quarterly contracts with steelmakers as spot prices rose.
For domestic customers with six-month contracts, the company plans to raise steel prices by between 1,500 yen and 2,500 yen in the fiscal second half ending March 2011.
JFE shares fell 0.6 percent to 2,673 yen as of 2:52 p.m. on the Tokyo Stock Exchange.
To contact the editor responsible for this story: Andrew Hobbs in Sydney at email@example.com.