Toyota Motor and Nippon Steel have raised prices of steel plates by another 20,000 yen per tonne (t) ($346/t) for a year from Oct’21-Sept’22, with delivered prices touching JPY 116,500/t from April. It may be recalled these companies had raised prices by JPY 20,000/tonne ($173/t) through negotiations in the second half of last year.
Domestic automobile steel plate price negotiations
Notably, Toyota Motor Company accepted the price negotiation method of Nippon Steel. A pre-determining method has been adopted from the first half of FY’22 where the price and quantity together will be considered before shipment of the steel.
Japan already has this method in place for supplying automobile steel sheets after the price and quantity are decided upon. Thus, it is being discussed that the same method should be applied by mills in their negotiations with domestic automobile companies so as not to waste unnecessary cost and manpower.
However, it has been argued that this is not a very fair negotiation method, since automotive steel sheets are supplied to ensure a stable supply of raw materials before the price is decided, leading many to believe that the steel makers views are not properly reflected in the price negotiations.
In addition, many say the price application period determined through the first half negotiations is not decided in a way that it is properly divided into the first half or the second half, but is applied retrospectively from April.
It is not a fair transaction where the steel is delivered only after the price and quantity are unconditionally determined, as per steel manufacturers.
Note: This insight has been published in accordance with an article exchange agreement between SteelMint and SteelDaily.
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