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Toyota Agrees to Price Freeze on Steel
Toyota Motor Corp. has unexpectedly shelved its usual demand for lower prices from steel suppliers, The Nikkei reports.
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Toyota Motor Corp. has unexpectedly shelved its usual demand for lower prices from steel suppliers, The Nikkei reports.
Finished steel prices are heavily influenced by raw material costs, and those prices have dropped sharply, the newspaper notes. One example: Iron ore currently costs about $70 a ton, down 40% from last spring.
Analysts attribute the decline to weaker domestic demand for steel in China.
Last autumn Toyota decided against asking for mid-year price cuts from its parts suppliers. Some observers say the company opted to do the same for steelmakers to help balance the concession across its supply base. Steelmakers had expected Toyota to ask for price cuts of several thousand yen (roughly $50) per ton, according to The Nikkei.
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