Japan’s biggest steelmaker has warned it will push through more price rises, in a blow to car makers and machinery industries already grappling with surging costs.
Nippon Steel will need to pass on the sharp cost increases for inputs like iron ore and coking coal “promptly and fairly,” Takahiro Mori, executive vice president of Japan’s biggest steelmaker said this week in an interview.
“Otherwise, our profits will be squeezed.”
Nippon Steel and its domestic peer JFE Holdings' steelmaking unit have already boosted prices by half to record levels over the past year, as the cost of raw materials surged.
A global commodity boom has also allowed domestic steelmakers to secure better terms on contract prices agreed with customers. This is particularly the case for car makers, which have typically had more bargaining power.
Japanese manufacturers are already feeling the pain of soaring prices of steel and other materials in a country that imports everything from iron ore to crude oil.
Auto manufacturing major Toyota Motor, one of Nippon’s most important customers, has warned that “unprecedented” increases in raw material costs will weigh on its earnings. It forecast a fall in operating profit for the current year.
