subject: Steel Mills Are Asked To Revisit The Annual Pricing [print this page] Steel mills are asked to revisit the annual pricing
Steel mills are asked to revisit the annual pricing A number of person who in charge of domestic steel mills said to reporters, steel market continued downturn, the current pricing model ore prices fluctuated wildly, and had already overwhelmed by so many steel mills, they desperately want the three mines can restore the previously association of the annual pricing.
Bleak steel market finally shakes the strong iron ore prices, whose price has started from a high level callback. But compared with the financial difficulties faced by the global steel industry, including China, "easy-to-down ore prices are still highlights the monopoly status of the mine, the three mines in control of a flexible pricing model to the steel mills that bring severe fluctuated cost and business risks, "return to annual pricing" has become the focus of the steel industry and the mining.
Due to the churning of iron ore spot price, stock-based pricing mechanism makes steel industry suffered greatly profits, the vulnerability of the industry is also the signal most strongly dissatisfied with the current spot pricing mechanism.
Since the fourth quarter of last year, the market has been in downturn, steel prices and the cost of ore high caused steel low actual earnings, even it is unable to maintain product sales margins; in addition, the iron and steel stocks also became the main force of stock market "break net.
In the case of weak demand, volatility gives the steel industry is more prominent impact. It is worth noting that the plight of the downstream steel industry will ultimately affect the upstream iron ore prices. With the downturn of steel market and the increase in global iron ore supply, iron ore stone supply pattern has been changed comparing with that of a few years ago, which means that an era of the three mines reap huge profits by ore prices has been past, in such circumstances, more long-term and stable supply and demand mode of cooperation, not only good for steel mills, also useful for the mine.
What must be seen is the current uncertain economic outlook, especially in the case of mine still have the completely monopoly, make it not easy to return to the annual pricing, you may find some compromise solution, such as adding some flexibility Additional terms, or the similar quarter of bargaining, follow the previous fixed-price and determine the supply in the range of annual and short-term pricing.
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