UPDATE 2-Nippon Steel wins price hikes from carmakers-media Tue May 31, 2005 02:18 AM ET (Updates with new report) TOKYO, May 31 (Reuters) - Top Japanese steel maker Nippon Steel Corp. (5401.T: Quote, Profile, Research) has secured an agreement with Toyota Motor Corp. (7203.T: Quote, Profile, Research) and Nissan Motor Co. (7201.T: Quote, Profile, Research) to raise steel sheet prices by up to 20 percent, Japanese media reported on Tuesday.
The steel maker will raise prices by about 10,000 yen ($93) per tonne in a fourth hike since 2003 and the biggest since the go-go years of the late 1980s, the Nihon Keizai newspaper said in its evening edition.
That followed a morning report in the Yomiuri newspaper that Toyota had agreed to an average price increase to around 70,000 yen per tonne from 62,000 yen, less than a rise of about 10,000 that Nippon Steel had wanted. The settled price would be applied retroactively to shipments that started in April, the daily said.
All three companies declined to comment. Nissan Chief Operating Officer Toshiyuki Shiga told a news conference earlier to launch the new Serena minivan that the company was still in talks with steel makers over prices.
Nippon Steel is also expected to clinch a deal with Honda Motor Co. (7267.T: Quote, Profile, Research) soon, while other steel makers will likely reach agreements involving similar price hikes with auto makers, the Nihon Keizai said, citing industry observers.
Robust economic growth in China has helped fuel steel demand on the global market, but has also led to surges in the price of raw materials such as iron ore and coking coal.
Steel makers, facing a cost increase of more than 1 trillion yen ($9.26 billion) for the year that started in April, want to pass on the higher materials costs to user companies.
Nippon Steel said in February it had agreed to pay Brazilian miner Companhia Vale do Rio Doce (VALE5.SA: Quote, Profile, Research) and Anglo/Australian miner Rio Tinto Ltd./Plc. (RIO.AX: Quote, Profile, Research) (RIO.L: Quote, Profile, Research) 71.5 percent more for iron ore in the year started in April.
Meanwhile, the price of coking coal has more than doubled, Nippon Steel has said.
Japanese steel makers including Nippon Steel had secured a 20 percent rise in steel plate and sheet prices in talks with shipbuilders and electronics firms, the Nihon Keizai reported in March.
After the reports, shares in Nippon Steel ended up 1.2 percent at 254 yen, while Toyota lost 2 percent and Nissan shed 1.2 percent. Honda ended flat at 5,340 yen. The key Nikkei share average was virtually unchanged at 11,276.59. ($1=107.94 Yen)
