Posted on 15 Aug 2019
US Steel has decided to opt out of spot market-based adjustable price contracts for 2020, Kallanish learns from a company memo.
Uncertainty and volatility in the flat-rolled market is complicating both the supply- and demand-sides of steelmaking, and this can largely be traced back to small volumes of spot-market transactions influencing customer contracts, the letter says.
“We have ample price-supply options in which we will be more than happy to engage with our customers to meet their volume and price needs, just as was done mutually many years ago,” the memo states. “Transaction by transaction discussions and/or monthly negotiations used to be a staple in our business relationships, not to mention quarterly, semi-annual, and annual fixed price agreements, and we are prepared to utilise any of these options while also satisfying the volume needs of our customers over a defined period.”
Buy-side market sources largely reacted to the memo with a mix of surprise and pessimism.
