Tinplate pricing on rise, but how high is up in air

Dec 15, 2006 | 06:48 PM | Scott Robertson

U.S. prices for tinplate are set to rise after the first of the year, but a change in pricing policy by major producers leaves many customers questioning how sharp the increases will be.

Historically, major tinplate producers—notably Mittal Steel USA Inc., Chicago, and U.S. Steel Corp., Pittsburgh—have announced across-the-board increases late in the year for the following year.

This year, however, no such announcements have been made.

Instead, the mills are going to buyers and negotiating price increases on an individual basis—meaning some buyers are being asked to pay increases of as little as 2 percent while others are being asked to pay nearly 20 percent more.

The disparity lies in mills' attempts to bring more order to tinplate pricing, market sources said. Two years ago, tinplate customers with multiyear contracts in place refused to pay surcharges implemented by the mills. Others without such contracts paid the surcharges, which last year were rolled into base prices.

This year, the mills seem to be trying to level the playing field.

"It seems like if you had a low price two years ago because you didn't pay the surcharge, you're getting a higher increase now," one tinplate buyer said. "And if you had the higher prices and were paying all along, your increase this year is less. It's really caused some confusion in the market because it seems like everyone you talk to is paying a different increase."....