Ispat Inland touts 'value in sharing risk'

Nov 15, 2004 | 08:16 AM | Scott Robertson

Ispat Inland Inc., East Chicago, Ind., is making steady progress in contract talks with major original equipment manufacturers because customers are becoming more receptive to the notion of sharing the burden of rising raw materials costs.

Lou Schorsch, president and chief executive officer of Ispat Inland, said during a conference call with analysts Friday that about 15 percent of the company's contract customers had agreed to 2005 contracts that include some form of variable pricing based largely on fluctuations in steel input costs.

"As contracts come up during the course of the year, the number is growing," Schorsch said. "Customers are seeing the value in sharing risk (of rising raw materials costs)."

Ispat Inland and other North American steel producers expect input costs--for items such as coke, coal, scrap, iron ore and some alloys--to continue to rise during 2005. Producers say they can't bear the burden of those increased costs and are dealing with them by imposing raw materials surcharges.....