Steel prices fall before scrap in ‘curious’ move
May 03, 2013 | 05:09 PM
| Samuel Frizell
NEW YORK Some domestic steel mills may be considering moving away from using scrap-based raw material surcharges as a component in their finished steel pricing as recent volatility in scrap prices erodes suppliers pricing power, sources familiar with the situation said.
No mills have officially announced an intention to stop using raw material surcharges in their net long steel transaction prices, but according to a number of market players, some steelmakers have been having preliminary internal discussions about whether its time to re-evaluate their pricing structures in light of significant scrap fluctuations in recent months.
Traditionally, many steel mills announce changes to their net transaction pricesoften comprising a base price and a raw material surchargein the days following the release of AMMs monthly consumer buying prices for a number of scrap grades in the Chicago market, used as the basis for some mills surcharges.....
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