Certain East European mills are re-negotiating existing contracts
SteelOrbis is informed that, some East European mills, especially those located in
Poland and Czech Republic, are re-negotiating their existing contracts signed in Q4, 2003 for Q2, 2004 deliveries. Market sources report that, the decision to increase existing contract prices by €60/mt by the LNM-owned East European mills is irritating West European traders and stockists from
Belgium,
Germany and
France as they find it very difficult to accept the price change of firm contracts.
It is also reported that, materials booked for delivery to the US are given a priority when it comes to deliveries due to their higher booking prices. On the other hand, lower priced Western European deliveries are postponed to Q2, 2004 and are subject to contract re-negotiations.
Some buyers are already reported to having started negotiations, trying to achieve a lower price increase, and some buyers are said to be considering to open law-suits against these last minute price negotiations.
As one European trader puts it: “We would have preferred to buy at higher prices from Western European producers, if we had know that our firm contracts were to be re-negotiated.” It seems like distressed times are ahead for some Western European traders and stockists.