Sumitomo Metals Considering a Domestic Price Increase for Seamless Pipes

Sumitomo Metal Industries, Ltd. (Sumitomo Metals) has announced that it is in negotiations with customers regarding a domestic price increase for seamless pipes.

1. Price increase overview
(1) Scope
The increase would apply to all domestic sales (spot and long-term contract) of seamless pipes.

(2) Timing
The increase would apply to seamless pipes produced from April 2008 onwards.

(3) Details
The Company is considering a 15% increase.

2. Reason for price increase
(1) Seamless pipe supply-demand is tight, so a price increase is necessary to ensure international parity and a stable supply.

(2) Moreover, we expect a rise in the price of iron ore, coal, ferrous alloys, and other raw materials in FY2008, as well as a rise in shipping charges.

3. Price increase background
(1) Overseas energy sector demand for seamless pipes should remain robust in FY2008. Domestic demand is expected to remain strong as well, particularly from the construction, industrial machinery, and plants sectors. Moreover, our customers have requested an increase in seamless pipe supply.

(2) At the same time, Sumitomo Metals believes its existing facilities are insufficient given current demand and forecasts for the future.

4. Miscellaneous
Sumitomo Metals is also considering raising its gas tubing price in April.