JFE Steel to raise prices by up to JPY 5000 a tonne for January

Bloomberg reported that JFE Holdings Inc is seeking to increase prices next quarter to pass on higher material costs to carmakers and other buyers.

Mr Tsutomu Yajima EVP at the company's steel unit said that the company plans to increase domestic contract prices by between JPY 3,000 per tonne and JPY 5,000 per tonne in the period starting January 1st 2011. It plans to raise the price of export hot rolled coils by USD 100 per tonne to USD 750 per tonne, the first increase in three quarters.

Mr Yajima said that contract prices for iron ore, used to make steel, will increase by USD 10 per tonne to USD 137 per tonne in January to March 2011 quarter from the preceding quarter. He added that "We haven't fully covered our costs and will have to ask to increase prices."

He said that JFE is in final discussion with coking coal suppliers to settle prices for the January quarter. 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 6 month contracts, the company plans to raise steel prices by between JPY 1,500 per tonne and JPY 2,500 per tonne in the fiscal second half ending March 2011.

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