Surcharge and Review Period

Over the past few months we have had to contend with extremely volatile prices on the raw material markets, with prices for hot-rolled wide strip steel in particular being virtually impossible to predict. The reasons include rising Chinese export and production costs and, in particular, the effects of the Russia-Ukraine conflict: in the coming period, substantial volumes of steel previously coming from these nations will probably have to be replaced on the world market.
WIKUS is cushioning a considerable part of the price increases and supply bottlenecks in the steel trade through numerous measures such as increasing production capacities, but there is currently no end in sight to the unstable price factors. We therefore introduced a variable price increase as early as July 2021 in order to maintain our supply capability.

Basis for the Determination

The development of the price of hot-rolled wide strip steel forms the basis for the surcharge. To ensure the greatest possible transparency, we review and chart the index for hot-rolled wide strip steel at regular intervals. The review takes place once per quarter.

Current Price Development and Trend

o provide the greatest transparency possible, we review and release the index for hot-rolled wide strip steel at regular intervals.

The current report from the Stahl Monitor shows that the price for hot-rolled wide strip steel has increased. Thus, we have to increase the surcharge with effect from May 1st, 2023 analogous to our criteria for the determination.

The German steel market is still extremely volatile and prices on the raw material markets continue to be extremely variable. According to experts, however, steel prices towards the end of the year are likely to be at a lower level than at the beginning of the year. One of the reasons for this is Chinese export prices, which have weakened marginally in recent months.

In the medium term, the rapid rise in energy costs for gas and electricity will cause new uncertainties, with far-reaching consequences not only for German private households but also for industries – especially for manufacturing companies that operate internationally. Nonetheless, we are passing on the cost advantage on the steel market to our customers, but will have to monitor the extent to which the cost situation also influences producer and purchasing prices with regard to our upstream suppliers.

Amount of the Surcharge

As described, the basis for the regular determination of the surcharge is the current index for hot-rolled strip steel on the reporting date.
You will find the threshold values for the calculation in the following graphic, based on bimetal saw bands.
With this approach, we ensure that price reductions on the raw materials market are also regularly passed on to you.

Next steps

We will continue to communicate with transparency, keep you up to date with regular information, review steel prices, and make changes to the above table accordingly.

Please contact your sales representative if you have any questions.