Assofermet expresses concern over AST contract renegotiation

President of Assofermet, Riccardo Benso

Assofermet, the Italian distributors’ association, has sent an official letter to voice its concern over the decision of sole domestic stainless producer Acciai Speciali Terni (AST) to renegotiate existing contracts due to increasing prices.

The association notes this is putting distributors in a difficult situation due to the fact the increase impacts February deliveries. The entire supply chain is risking delays in supply due to AST’s decision. This is being exacerbated by the difficulties in finding alternative supply sources in Europe or from imports, on account of trade defence measures, the association observes.

AST introduced a €214/tonne scrap surcharge for all its deliveries starting from February (see Kallanish passim). It told customers the increases are caused by the sharp scrap and raw material price rises, exacerbated by the shortage in stainless steel scrap. The move intends to rectify AST’s past and current sales prices that do not take into account the skyrocketing costs.

The move by AST is not isolated. Similar decisions have also been reported in the carbon steel sector, with large suppliers trying to renegotiate existing contracts due to the sharp increase in raw material costs seen at the end of last year, Kallanish notes.