Nikkei business daily reported that major Japanese steelmakers will press for cuts of 40% in iron ore prices and 60% to 70% in coal prices for fiscal 2009 due to the falling costs of natural resources. As per report, the cuts would bring iron ore and coal prices into line with those to which the steelmakers agreed for fiscal 2007 and save the industry around JPY 3 trillion.

Nikkei said that steel companies will be looking for prices of about USD 50 per tonne for iron ore, down from USD 80 to USD 90 for fiscal 2008 and USD 100 per tonne for coal, down from USD 300, as they seek to offset an increase in operating costs caused by a reduction in output this year. Japan"s steel industry is set to slash output by at least 30% in January to March 2009 quarter and hopes to offset the impact of lower capacity utilization by asking for sharp raw material price cuts.

It said the steelmakers could make their requests as early as next week to iron ore suppliers Companhia Vale do Rio Doce of Brazil, BHP Billiton and Rio Tinto and will also negotiate coal prices with the latter two companies.