NEW YORK Severstal North
America Inc. has set new minimum base prices for its
flat-rolled steel products and vowed to halt selling against a
discounted CRU index price, according to an April 17 letter to
The companys new price for
hot-rolled coil will be $32 per hundredweight ($640 per ton),
while cold-rolled and hot-dipped galvanized sheet will be
priced at $37 per cwt ($740 per ton) effective April 22, the
Dearborn, Mich.-based steelmaker said.
Severstal also said that it has
been reviewing its pricing methods, particularly as they relate
to the CRU index price, a move that follows ArcelorMittal USA
LLCs leading announcement earlier this week that it would
no longer enter into new agreements based on a discounted CRU
amm.com, April 16).
"Over the past few months,
Severstal has been reviewing current pricing methods, including
their effect on our customers," Tom Marchak, Severstals
vice president of commercial, said in the letter. "We have
found that discounts off a CRU indexed price do not always
reflect market conditions."
While the company said its
contracts for 2013 will be honored, it will "no longer consider
agreements based on a discounted CRU price" going forward.
The steelmaker also will work
with customers "to identify pricing mechanisms which best serve
our mutual needs," it said.
Other mills are expected to
follow the move away from discounting off the CRU, sources
said, particularly as those discounts are said to be eroding
already thin margins for steelmakers (
amm.com, April 17).