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2005 News Release
June 13 
June 13, 2005
Sliding Scale Introduced for Casting Rolls
—Applied to High Speed Steel Rolls and Indefinite Chilled Rolls—| Tokyo, Japan, June 13, 2005—Hitachi Metals, Ltd. announced today that it has decided to introduce a sliding scale raw material price system for casting rolls for steel rolling. |
1. Background and Summary
Essential to the process of rolling steel products, rolls are an important material that affects steel quality and productivity. In particular, high-performance rolls require large quantities of rare metals as raw materials, such as molybdenum, vanadium and tungsten, which are internationally traded commodities.Since 2003, market prices for rare metals have fluctuated wildly due to the unbalancing of supply and demand conditions. As a leading manufacturer of rolls, Hitachi Metals has consequently made every effort to stabilize supply by correcting product prices and lowering raw material prices. Despite these efforts, greater-than-expected changes in international market prices have surpassed our ability to absorb cost increases.
To minimize our exposure to changes in international market prices, we have decided to introduce a sliding scale pricing system, tied to raw materials prices for molybdenum, vanadium and tungsten, that will be applied to high-performance high speed steel rolls*1 and Indefinite Chilled rolls with improved wear resistance*2 in order to ensure a stable supply of products.
The introduction of the sliding scale pricing system based on raw materials will serve to ensure a stable supply of high-quality products through the optimal distribution of management resources in planned capital investment and research and development. Over the medium and long term, the system will contribute to cost reductions for both Hitachi Metals and its customers, leading to firmer and better relationships with customers.
2. Details
| (1) Rolls affected | 1. High speed steel rolls 2. Indefinite Chilled rolls with improved wear resistance |
| (2) Start date | Rolls to be delivered after August 1, 2005, including orders already received |
| (3) Raw materials | Molybdenum, vanadium, tungsten |
| (4) Calculation method | Sliding scale prices will be determined by average
raw material costs during a three-month period falling two
months prior to the product delivery date. (Example: Raw material costs in June-August 2005 will affect prices of products to be delivered in October-December 2005.) |
| Customer Inquiries: | ||
| Mikio Sakiyama Roll Company, Hitachi Metals, Ltd. Telephone: +81-3-5765-4325 Facsimile : +81-3-5765-8317 |
||
| Press inquiries: | ||
| Akio Minami Corporate Communications Office, Hitachi Metals, Ltd. Telephone: +81-3-5765-4079 Facsimile : +81-3-5765-8312 |
||
Additional information
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