Fabricators and processors on various levels of steel and metals products need to go shoulder-to-shoulder with their business partners through times of erratic price leaps, says their German federation WSM.
The next wave of steel prices and drastic energy price increases is rolling in on suppliers, WSM notes with reference to developments since March. While this is not necessarily in line with short-range expectations of price developments by many market observers, WSM still addresses the overall unprecedented unpredictability of prices.
“Manufacturers who do not cooperate with their partners now, may soon have no partners left,“ WSM says, pointing to the shrinking liquidity reserves of its member firms.
“Only with joined forces, suppliers and customers can avoid the third wave that is building up,” warns WSM’s managing director Christian Vietmeyer, who speaks on behalf of about 5,000 companies.
He refers especially to what he calls the “German model“ of dividing value-adding steps along the chain in global business, and that is under particular threat if firms dispute over costs.
Already in before the third wave was brought by the attack on Ukraine, mill prices were 50% above the already very high level of the previous year, “and for alloyed material we are seeing increases of 80%. And this is just getting worse,“ Kallanish hears from Vietmeyer. Steel and aluminium processors have material cost shares of 40-60%.
WSM notes that the enormous price jumps cannot always be explained by the crises and conflicts, and it expresses doubt over the direct influence of the Ukraine war on steel pricing in Western Europe.
Christian Koehl Germany