Nippon Steel to pay double for coking coal in fiscal 2005

Yahoo!: Nippon Steel Corp has agreed with Australian and Canadian suppliers to pay a record 120 usd or so per ton of coking coal in fiscal 2005, about double on the year, the Nihon Keizai Shimbun reported over the weekend, without citing sources.

In a bid to secure a steady supply, Nippon Steel has accepted a second straight year of price hikes presented by coal producers such as BHP Billiton and Canadian entity Elk Valley Coal Corp on the back of tighter supply-demand conditions, the report said.

The price hike will affect hard coking coal, which is used to manufacture steel.

Among other steelmaking materials, iron ore is expected to rise in price in tandem with the uptrend in coking coal prices, which would translate into even higher costs for steelmakers, the report said.

Nippon Steel and the other companies will not likely be able to absorb the additional costs on their own, so they will try to pass them onto major customers such as automakers and shipbuilding companies next spring

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