Nippon Steel Seeks Higher Domestic Steel Prices to Ensure Supplies
Bloomberg reported that Japan’s top steel-maker Nippon Steel has issued another warning to steel users in Japan to accept steel price hikes or stable supply may not be guaranteed any more. Nippon Steel Executive Vice President Mr Takahiro Mori said “Steel prices in Japan are very low, compared with internationally. Particularly, we’ll need to urgently correct the contract prices that are settled through discussion with big users. The gap is more than you could imagine. Major overseas mills are benefiting from high steel prices in their home markets, but we don’t have that.”
Mr Mori, referring to the company’s analysis of its relatively weaker profits, said “In the second half of the last year, we desperately cut costs and worked hard to lower breakeven points, so I don’t think the company’s costs are higher than those of major overseas players.”
Nippon Steel President Mr Eiji Hashimoto also warned last week that the company won’t be able to take responsibility for stable supply unless unreasonably low domestic prices are corrected.
Steel prices have soared from China to North America amid a broader commodities boom, prompting global mills to report bumper quarterly earnings. While second-half profit at Nippon Steel and its domestic peer JFE Holdings Inc. showed significant recovery, they have trailed those of major rivals such as European giant ArcelorMittal SA and South Korea’s Posco.
Source - Strategic Research Institute