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|Raw Material Cost Increase To Exceed 3 Trillion Yen In FY2008|
|= Steel product price has to increase by 30,000 yen/ton plus =|
At the regular press conference held on April 25 in Tokyo, Hajime Bada, Chairman of the Japan Iron and Steel Federation (and concurrently president of JFE Steel) commented surging ferrous raw material prices as follows:|
Regarding the cost increase due to the surging raw material prices, "Both iron ore and coal prices are negotiated on an individual basis, and all have not been settled yet. Based on this premise and generally speaking, it appears a total of two trillion yen of cost increase will come out of these two items, as a whole for the Japanese steel industry. In addition, another trillion yen of cost increase will result from ferrous scrap, manganese ore and ocean freight that are tracing an uprising trend. In terms of steel product price, these would signify an increase by in excess of 300,000 yen per ton."
Mr. Bada further said, "From fiscal 2003 to fiscal 2007, raw materials costs including freight experienced increase by 3,600 billion yen. In fiscal 2008, that magnitude of increase is about to take place in one year." He further said that while taking strong cost reducing initiatives, the industry will seek steel users' understanding of and consent to steel price increasing request.
As regards the cause of surging raw material prices, Mr. Bada commented: "The largest cause is the stringent supply - demand relation. Namely mine development is behind demand increase. If asked whether or not we would buy a mine, there is a one-digit price difference in what they would offer and what we presume."
|last modified : Fri 02 May, 2008 [11:16]|