core sector communique

Sumitomo Metals Plans to Revise Domestic Pricing of Seamless Stainless Steel Pipes 


Sumitomo Metal Industries, Ltd. (Sumitomo Metals) 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.

1. Overview of the revision
(1) Scope
The revision will apply to seamless stainless steel pipes supplied to all domestic customers
(spot sales and long-term contracts).
(2) Timing
The revision will apply to May 2010 contracts
(3) Price revision
10% price increases.
If the price of nickel continues to rise, Sumitomo Metals will consider an additional price increase for contracts of June 2010 and onward.

2. Background of price revision

(1)	The price of nickel, a major raw material, has been rising since the beginning of this year. It rose from around $8/lb in the latter half of 2009 to over $10/lb on average in the February-April period of 2010. Such soaring price has resulted in deteriorating our profitability in seamless stainless steel pipes, making it necessary to reflect the cost increase to our sales prices swiftly.
(2)	Sumitomo Metals' seamless stainless steel pipes are mainly produced at its Steel Tube Works in Amagasaki. We expect long-term steady demand for the pipes in energy-related areas such as power generation, oil refining, and petrochemical.