Toyota Motor Corp. and major steel makers have agreed to lower prices for steel sheet for the April-September period from the previous six months, marking the first price cut in a year, industry sources said Thursday.
Toyota and the steel makers, including Nippon Steel & Sumitomo Metal Corp., reached the agreement as prices for iron ore and coal, used to make steel sheet, have dropped and are not expected to rise soon, according to the sources.
Toyota has apparently decided to reduce the price of steel sheet supplied to its parts makers by ¥6,000 per ton for the half-year period through next March from the current six-month period through September. The margin of the price cut by the steel makers for the April-September period is believed to be less.
The price cut for steel sheet may reduce profit margins for the steel makers, likely forcing them to step up their efforts to curb production costs.
The prices of iron ore and coal declined in the October-March period but Toyota held the price of steel sheet steady.
Toyota and its steel sheet suppliers negotiate the price of steel sheet every six months, and the price is seen as having an impact on deals made by other industries that use large amounts of steel sheet, such as shipbuilders.