Tinplate /
Producers look for up to 50% increases in contracts
Producers look for up
to 50% increases in tinplate contracts
Tuesday, 16 September 2008
Tinplate producers are likely to seek price increases of up to 50% on their
2009 annual supply contracts with packaging industry customers, sources at ArcelorMittal tell Steel Business Briefing.
The targeted increase in tinplate contract prices is said to reflect the
increased costs of iron ore, alloys, energy, transport and labour,
as well as price developments in steel which have seen spot prices rise by
60-100% in the first half year, sources add.
It is anticipated that the targeted level of increase would remove the need to
levy any surcharges next year, as occurred halfway through this year, the
sources say. If this is the case it would suggest that strip mills anticipate
significant increases in their input costs in 2009, and possibly higher steel
prices as well.
SBB also understands that tinplate producers are still keen to move from
January to December annual contract periods to an April to March model. This
may require some interim adjustments to be agreed by negotiation.
Meanwhile, market participants suggest that tinplate is becoming unprofitable
for a number of steelmakers, and they are attempting to reduce exposure to this
product. It is rumoured that ArcelorMittal
aims to reallocate some tinplate production capacity in Europe and
Corus announced in April its intention to cut 300,000 tonnes/year
of tinplate capacity at its plants in
See also: “Are long term steel contracts unfit for purpose?” SBB Insight No.77,
September 11.
© Steel Business Briefing 2008