Sumitomo Metals Plans to Revise Domestic Pricing of Seamless Pipes

Sumitomo Metal Industries, Ltd. (Sumitomo Metals) has begun negotiations to revise domestic pricing of seamless pipes for all domestic customers.

1. Overview of the revision
(1) Scope
  The revision will apply to all domestic customers (spot sales and long-term contracts) of seamless pipes.

(2) Timing
  The revision will be implemented from April 2010 onwards.

  Depending on pricing of raw materials and development of other factors, quarterly revisions may also be implemented.

(3) Price revision

 The revision will be an incremental price increase of 20%.

2. Background of price revision

 • Steel demand has been and is expected to keep increasing in China and other East Asian markets. Under this environment, the rising trend of raw material

   prices has been intensified. A surge in prices of major materials such as iron ore and coking coal appears to be inevitable, while auxiliary materials such as

   ferroalloy are also rising.

 • Demand for seamless pipes hit the bottom in the first half of fiscal 2009. Export demand of seamless pipes in the energy-related sector is on a recovery

   track, while domestic demand is also gradually increasing with a recovery seen in the construction machinery and industrial machinery sectors, for export

   products. Under the circumstances, this pricing revision will enable us to ensure stable supply of seamless pipes.

3. Other
Sumitomo Metals is also planning to implement similar price increases of gas tubes and other welded steel pipes.