Metalworking-fluid makers in talks to push through price hike

Metalworking-fluid manufacturers in Japan began negotiations for a price mark-up of 20 yen (US$0.21) to 30 yen (US$0.32) per kilogram (kg). Manufacturers are caught between an escalation in raw-material costs due to higher crude-oil prices, and falling demand caused by the economic slowdown. Because they operate on thin margins, they have to run their plants at rates of 70% or higher to break even, but the domestic market, which is valued at 70-80 billion yen (US$746 million-US$852.57 million) per year, is crowded with 50-60 manufacturers, giving them limited bargaining power. Their products also are highly specific in use, resulting in the production of many customized products in small quantities, but they have been unable to have their R&D costs reflected in product prices. (April 19, 2010)