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2014 FORECAST: Outokumpu’s new daily alloy surcharge system explained
January 06, 2014 - 11:17 GMT
daily alloy surcharge
stainless steel surcharge
Outokumpu’s head of Europe, Middle East and Africa (EMEA) sales, Olli-Matti Saksi, and its director of strategic projects, Paul Schlimgen, explain how its daily alloy surcharge system will work.
Changes to the stainless steel pricing system announced by
Outokumpu were put in place to reduce risks related to price
volatility, the company told Metal Bulletin sister title Steel
First. The Finnish producer announced in November that it
would switch to a daily calculation of the prices for
alloys used in stainless steelmaking for all its European
distributors buying flat products from January 1 2014, as
opposed to the current monthly average system. The Espoo-based
business posted a loss before interest, taxes, depreciation and
amortisation of €52 million ($71 million) for its third
quarter of 2013. "Our goal was to give our customers more
freedom on pricing decisions. Secondly, we run quite high metal
risks with the alloy surcharge that we cannot hedge," Schlimgen
said. "Therefore, we wanted to find a system that
allowed us to hedge and decrease our losses. Another minor
reason was to reduce the high order volatility - for
both the customer and...
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