NEW YORK A secondary lead refining company has confirmed
that it signed a series of 2013 contracts using a
cost-plus pricing model, saying that it
wouldnt be able to stand the losses that (it) had
A company representative told AMM that it did not sign
any contracts for 2013 based on the London Metal
Exchange, with all of its new contracts either
based off costs or a conversion agreement.
Negotiations for 2013 contracts between lead producers and
consumers were fraught in the fourth quarter of 2012 as
producers pushed for a pricing model that incorporated costs
rather than LME prices due to the high cost of junk lead
amm.com, Oct 29
While junk battery prices have recently fallen from the
historic highs seen through much of 2012, the representative
was adamant that using a cost-plus contract still made sense
going into 2013.
Junk batteries are currently trading in a range of 37 to 39
cents per pound, having traded at 43 to 45 cents per pound in
Granted, the prices have eased, but even last week the
battery prices went up slightly, he said.
Were having some cold weather up north but we
havent had any in the whole southern part of the U.S., so
the jury is still out as to what kind of battery season
its going to be.
I feel it will be better than last winter, though
its possible we could see the price of junks up to where
they were last year, he said. If that is the case,
smelters like us are better off to cover their downside. You
cant stand the losses we had last time.
He said that their customers who signed the contracts had
investigated the market and been given the same cost-plus pitch
from other smelters. They werent happy, but they
didnt have a lot of choice, he said.
The company still has a couple of London Metal Exchange-based
contracts with customers that were not up for renewal, the
Sources told AMM last week that the majority of new contracts
signed for 2013 utilized a traditional LME-plus
model, even though producers have pushed for cost-plus
contracts since October (
amm.com, Jan. 4