Japanese at loggerheads over steel

Japanese steel and vehicle companies are set to begin negotiations later this month over the price of automobile steel sheets, industry officials said this week.

Japanese steel and auto companies are set to begin tough negotiations later this month over the price of automobile steel sheets, industry officials said this week.

While Nippon Steel Corporation and other steelmakers want to raise steel sheet prices by up to 20%, Toyota and other carmakers are adamantly opposed to any price hike, officials said.

Steelmakers want price hikes because most suffered losses in the fiscal year to March 31 due to sharp falls in steel products prices.

But the automotive industry, which generally reported robust earnings by the end of 2001, are opposed to a hike because they believe further cost cuts are needed to better compete in the global market.

‘The steel sheet prices have just declined too much,’ said Akira Chihaya, president of Nippon Steel and chairman of the Japan Iron and Steel Federation.

Toyota, which is expected to produce cars in China, is trying to put pressure on steelmakers not to raise prices by indicating it may otherwise procure steel sheets in China.

Given prolonged deflation in Japan, steelmakers may find it hard to raise prices.

‘The best they can do is to have automakers accept no further price cuts,’ an auto industry analyst said.

Source: Kyodo News