Price Changes for Cutting Tool Products

Sumitomo Electric Industries, Ltd. (head office: Chuo-ku, Osaka, President: Osamu Inoue; hereafter "our company") will change its prices^* for Hardmetal cutting tool products ordered from July 1, 2022 thereafter.

　In addition to the risks posed by the novel coronavirus pandemic and the long-term political and geopolitical risks, our company is facing a business environment filled with continuing difficulties which include shortages of components such as semiconductors, higher material prices and rising logistics costs due to container shortages and congested ports etc., and it is unclear when any of these issued will be resolved.

　For cutting tool products in particular, we are dependent on China for more than 80% production volume of tungsten ore, the main raw material. However, in addition to the recovered demand within China, in Europe and the US; as well as the supply uncertainties caused by the Russia-Ukraine conflict, the raw material price of APT (ammonium paratungstate), an intermediate raw material for tungsten which serves as an indicator of the international market, has gone up by 30% year-on-year. Furthermore, the rapid increase in demand for cobalt as a battery material due to the spread of electric vehicles (EVs), has also led to a rising price trend on the international market, along with the effects of rising production costs and logistic disruptions. The current raw material price is approximately double that of the same period last year, a significant increase.

In such a business environment, our company has made every effort to reduce costs through streamlining our production, logistics, sales and administrative departments. However, we cannot resolve these issues through our own corporate efforts alone and it has proved difficult to maintain current prices for cutting tool products. In this context, we have decided to implement price revisions in order to further improve the stable supply of our products and services.

The target products and price revision rates are as shown below.

Changes by Product

Target products		Price revision rate
Cutting tools	Indexable inserts	+15%
	Round tools, such as MultiDrill and solid endmills etc. ※ Include brazed carbide, CBN or PCD - endmills, drills, reamers etc.	+15 to 20%
	Holders, spare parts etc.	+15%
	Indexable CBN or PCD inserts	+15%
	Other special-made cutting tools	+15%
Molds, wear-resistant tools etc.		+15%
Alloy materials		+15% or more

^*These are our company's sales prices. Resale prices are not regulated by our company.