Finland-based
stainless steel producer
Outokumpu has announced that it will introduce the daily alloy surcharge pricing model for distributors in Europe, instead of the current monthly pricing model. The daily alloy surcharge will cover new orders as of January 1, 2014 onwards.
According to the current monthly model, the alloy surcharges for
stainless steel are fixed monthly based on historical alloy prices. In the new pricing model,
Outokumpu will communicate the alloy surcharges on a daily basis for its customers and the customers can flexibly decide whether to fix the alloy surcharge on the order date or on any other date between the order and mid-week prior to the delivery week.
Outokumpu indicated that the daily alloy surcharge reacts faster and reflects the most recent raw material quotations, and gives customers more influence in choosing the time to fix the alloy surcharge. The daily alloy surcharge does not affect
stainless steel base prices. The company believes that the daily alloy surcharge decreases volatility and enables easier hedging of raw materials positions.