Steel Products
January 25, 2013
SMU Survey and Index-Based Contracts
Written by John Packard
The issue of excessive discounting against CRU and other index-based issues raised by ArcelorMittal in their price increase announcement are ones which Steel Market Update has been researching and which we began raising in our last steel market survey. During conversations with service centers, steel mills and end users we were catching frustrations with the contract negotiation process and we have been curious to know how deep these concerns might run. SMU is not ready to run a major article on the subject as it is a fairly complicated one, but we will provide the results from last week’s survey where we asked a couple of questions on the subject.
We asked the service centers how many purchase steel based on the CRU or other index-based formula from the domestic steel mills. We found 61 percent of the service centers do purchase at least some portion of their steel on an indexed basis.
