On May 17, Japanese steelmaker Sumitomo Metal Industries, Ltd. (Sumitomo Metals) announced that it has begun negotiations to raise pricing of seamless stainless steel pipes for all domestic customers, due to a surge in the price of nickel, a major raw material for these pipes.
Accordingly, Sumitomo Metals will increase the price of seamless stainless steel pipes by 10 percent for all domestic customers, including spot sales and long-term contracts, applicable to May 2010 contracts.
According to the company statement, the price of nickel has been rising since the beginning of this year. It rose from around $17,637/mt in the latter half of 2009 to over $22,046/mt on average in the February-April period of 2010. Such a soaring price has resulted in a deterioration of the company's profitability in seamless stainless steel pipes, making it necessary to reflect the cost increase to its sales prices. The company said that it will consider an additional price increase for contracts of June 2010 and onward, if the price of nickel continues to rise.
Sumitomo Metals' seamless stainless steel pipes are mainly produced at its Steel Tube Works in Amagasaki. The company expects long-term steady demand for the pipes in energy-related areas such as power generation, oil refining and petrochemicals.