Nippon Steel Corporation has recently decided to increase automotive steel prices by 20-30% or by $285/t supplied to Toyota Motors under the terms of third agreement, which will come into effect from October 2022. Both the companies review automotive steel prices every six months based on iron ore and coking coal prices.
The hike in automotive sheet prices is mainly due to rising prices of raw material such as coking coal on Russia’s invasion of Ukraine. The hike is believed to be the highest-ever negotiated by both the parties, as per media sources.
This agreement might affect prices of steel products in other sectors such as shipbuilding, electrical appliances, construction machinery and building materials.
The rise in raw material prices and depreciation of Japanese currency (JPY) made it difficult for Japanese steelmakers, as they mostly import raw material.
Moreover, with the surge in energy prices, the steel major has planned to resume its investment in coking coal production.
~ Inputs from GMK Center.
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