US tin mill product makers winning higher prices

Dec 12, 2008 | 12:39 PM | Scott Robertson

U.S. producers of tin mill products are seeking contract price increases for 2009, trying to eliminate a disparity that exists between large- and small-volume buyers in a market that is expected to be stronger than most for steel.

There are only two large producers of tin mill products in North America U.S. Steel Corp., Pittsburgh, and ArcelorMittal USA Inc., Chicago. Other companies, notably Ohio Coatings Co., Yorkville, Ohio, and USS-Posco Industries Inc., Pittsburg, Calif., apply tin coating to substrate supplied by their parent companies.

Tin product manufacturers in years past would make annual price announcements on tin products in the late fall, with the new prices going into effect the following January. More recently, they have abandoned that practice and taken to negotiating prices with individual customers. Thus, tin product pricing becomes more difficult to gauge.

ArcelorMittal SA, Luxembourg, said during its second-quarter conference call earlier this year that it likely would seek price hikes of around 30 percent from U.S. customers for 2009. Company executives didn't respond to requests for comment on how those negotiations played out, while U.S. Steel declined comment, citing company policy not to publicly discuss price contract talks.

However, interviews with multiple industry sources, indicate that mills have been successful in pushing through price increases ranging from 15 percent to more than 35 percent on many contracts.

"There is a big disparity in the amount of increases being sought from the larger can companies and the smaller guys," one tin products buyer said. "The smaller guys were paying more last year. The mills tried to get larger customers to pay more at mid-year (2008) when (steel) prices went up, but the big guys had contracts and balked at that."....

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