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Kobe Steel to revise roll margins of aluminum rolled products

October 15, 2014

Kobe Steel, Ltd. has decided to revise the roll margins of its aluminum rolled products (flat and extruded products) as outlined below and will begin negotiations with each of its customers.

Revisions to Roll Margins

Products subject to the revision:
All aluminum rolled products (flat and extruded products)
Range of revisions:
Revisions have been set for each product taking into consideration the profit situation of the product. Roll margins are anticipated to increase by an average 15 percent.
Effective date:
Starting from January 2015 shipments

Background to the Revisions

Since 2011, Kobe Steel has been hit by steep increases in energy costs, including power generation and LNG. Kobe Steel has been making efforts to reduce expenditures to absorb the higher costs. However, higher freight charges along with increased prices of rolling-mill lubricants, secondary materials and other supplies have led to the situation where profits are worsening although demand is robust. The securing of production capacity to match demand and necessary investments to maintain and improve quality have also been disrupted.

Having exceeded the limits of absorbing the higher costs on its own, Kobe Steel will begin negotiations with its customers soon on revising the roll margins in order for customers to shoulder a portion of the costs.