- Fast rising steel prices (including surcharges) for short-term contracts. Since 2002: up to +130%; in 2004: + 50-70%. This started before the Chinese boom
- (Historically) high prices in the EU compared to other regions, e.g. Asia
- A significant price gap between spot and contract prices (SMEs vs. OEMs)
- Different contract running times (between three months and three years) cause different price levels in the same market segment
- Price announcements are not reliable and not well communicated, especially in long products.
2. Supply
- Long-term quotations and deliveries are needed, but no longer obtainable: when our members make a quotation, they often do so for long term periods, e.g. a validity of a quotation for 3 months and an execution of 6 months. They usually have major difficulties in obtaining a fixed price from steel mills.
- Unreliable supplies
- Imperfect market conditions in Europe : quotas and anti-dumping
- Steel industry is going into downstream activities
- Lack of transparency of the market (e.g. Chinese coke) leads to speculation
Orgalime has been lobbying the different players in order to achieve our main objectives, which include:
- Increased information and reliable and clear communication on price developments for all steel products and raw materials at regular intervals
- Steel users should have the same payment conditions as other clients
- Steel price indices for standard qualities should be quoted on the London Metal Exchange, in order to increase transparency and reduce cyclical behaviour.
- Steel producers should deal with the long-term interests across the supply chain instead of short-term profit thinking
- Steel producers should stop acting in an unreasonable way in trade issues: there is no justification for quotas today (for example: from Russia , Ukraine , Kazakhstan ) and anti-dumping actions are also often abusive.
- Obtain from the European Commission and/or the national governments :
- Accurate, balanced, independent reports from the steel market (prices, stocks, capacities)
- Formal representation of steel users at Commission's services and activities.
- A gradual abolition of the quota system.
- Fight trade restrictions of third countries ( Ukraine : scrap / China : coke).
At an institutional level, Orgalime moreover represents the interests of steel users at the Consultative Committee for Coal, Steel and Industrial Change within ECOSOC.
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