Toyota to reduce steel prices for spare parts producers

Toyota Motor Group, Japan’s largest automaker, will reduce prices for flat products sold to affiliated component manufacturers covered by its centralized procurement scheme for the first half of fiscal year 2025/2026 (April-September). This was reported by Mysteel.

The decrease of about 15 thousand yen per ton ($101/t) is the result of an agreement previously reached between the automotive giant and steel company Nippon Steel.

Toyota announced a similar price reduction of 15 thousand yen per tonne in August 2024 for the second half of the 2024/2025 fiscal year (October-March). Prior to that, the automaker kept prices for its suppliers unchanged.

Toyota sets prices for steel supplies based on negotiations with major producers, including Nippon Steel, which take place every two years. The last round resulted in lower prices.

The company notified some of its suppliers by February 25 this year. Toyota took into account the price of iron ore, coking coal and other factors. The move is expected to provide cost relief to auto parts suppliers.

In March 2023, Nippon Steel agreed to raise steel prices for Toyota. In the first half of the 2023/2024 financial year, the steelmaker’s products went up by $74 per tonne.

As GMK Center reported earlier, Nippon Steel increased its unconsolidated steel shipments by 1.8% y/y – to 32.03 million tons in FY2023/2024. Consolidated steel production in the period increased by 0.5% year-on-year.