Price rally on steel

Price rally on steel   2007-03-08

There is no longer any doubt that we will experience a price rally on steel for the second quarter this year.

The underlying causes are several, where the economical boom in connection with a slow-down of Chinese export is the most important. Simultaneously the domestic demand in Russia generates a decreasing export to European Union. This together creates an imbalance between supply and demand and a substantial upward pressure of prices. Our ongoing contacts with suppliers also indicate a strong urge to compensate for higher costs on energy.

No price negotiations with suppliers for the second quarter have yet started so we are unable to indicate the magnitude for future price increases. However, all suppliers have so far shown a uniform outlook regarding heavily increased prices on wire rod. Our expectation is that all negotiations with our suppliers will be finished end of March.


Risk for lack of steel supply!   2007-03-22

As we earlier have informed you, the steel suppliers have announced substantial price increases for the second quarter this year. Negotiations are still ongoing, but it is very clear that all suppliers are going along with the previous announced price increases.

The excess demand in combination with the fact that the suppliers are fully booked creates an unbalance between supply and demand. To avoid too much of a turbulent situation there will be given very limited possibilities to increase already ordered quantities at the steel suppliers. The upcoming situation has a lot of similarities with the situation in year 2004.

As it was in 2004, it is also now very important for us to be able to supply our existing customers. We have therefore taken the decision to reject all eventual requests from new potential customers.

We are of course in close contact with our suppliers and we will keep you informed about the future development.