Japanese steelmakers as a whole will face a yearly cost increase of 100 billion yen or more if crude oil prices remain high for a year, an industry leader said Tuesday.
Maritime transport of raw materials from abroad and electricity bills will lead the projected cost increase, Akio Mimura, chairman of the Japan Iron and Steel Federation, told reporters.
Oil prices are surging due to global supply concerns in the wake of Hurricane Katrina. The Japanese steel industry has so far maintained that the adverse effect of higher crude oil prices is limited as domestic steelmakers have reduced their reliance on oil for manufacturing operations.