Thu Mar 10, 2011 8:27am GMT
* Price rise in line with estimates - analyst
* Talks with BHP continuing - Nikkei
* Steelmakers seeking 25 pct steel price hike after April
March 10 (Reuters) - Nippon Steel Corp , the world's No. 4 steelmaker, and mining giant Anglo American Plc have agreed to a 50 percent jump in coking coal prices for the April-June quarter, the Nikkei business daily said, which is roughly in line with market estimates.
"This is not a big surprise as it is roughly in line with steelmaker and market expectations," said Kazuhiro Harada, an analyst at Nikko Cordial said.
"There is no need to change our earnings assumptions."
Nippon Steel declined to comment on the report.
The company expects surges in coal and iron ore prices to result in a 15,000 yen ($182) per tonne rise in the cost of raw materials after April. That would add around 20 percent to its average product price of 81,000 yen per tonne in the Jan-March quarter.
The company said it was seeking a 25 percent price hike from domestic steel users, like Toyota Motor Corp , aiming to fully pass on sharply higher costs from the October-March period.
The Nikkei, without citing sources, said on Thursday the coking coal price would be raised to a record $330 per tonne for the April-June period, up from $220 in the current quarter, due to growing demand in emerging countries and supply disruptions in Australia after disastrous rains battered its mines and infrastructure.
Nippon Steel and other major steelmakers are still in talks with BHP Billiton , the world's biggest diversified miner, which wants to set prices monthly instead of quarterly, the Nikkei said.
Steelmakers are worried that monthly price revisions would lead to cost volatility. The agreement with Anglo American is for quarterly prices, the Nikkei said.
The price of iron ore, another major input, is also expected to climb to a record high of around $170 a tonne in the April-June quarter, up 20 percent.
But the price of iron ore could peak in the July-September quarter as slower demand for steel in China amid monetary tightening and ballooned inventories has weighed on raw material prices.
($1 = 82.755 Japanese Yen) (Reporting by Yuko Inoue; Editing by Joseph Radford, sourced Reuters)
Tags : steel mills, raw material, BHP Billiton, Rio Tinto
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