"The number of customers choosing one of the three daily
alloy surcharge options has grown constantly [over the past few
years] and the model is used by all our different customer
groups," a spokeswoman for Finnish stainless steelmaker
Outokumpu told Metal Bulletin on Thursday March 16, referring
to both end-users and distributors. The increasing use of the
daily surcharge has meant that both mills and their customers
are paying greater attention to daily fluctuations in the
prices of raw materials such as nickel and ferro-chrome.
Outokumpu’s improved earnings have been ascribed
in part to the greater use of the daily surcharge model, one
market observer told Metal Bulletin. "The daily alloy surcharge
system only helps the mills in an upward market but, if raw
materials prices go down, the mill takes all the risk and the
customer has none," a bank analyst told Metal Bulletin. "If
ferro-chrome and nickel prices were to drop this...