Steel market

Surcharge and Review Period

Over the past few months we have had to contend with extremely volatile prices on the raw material markets, with the prices for hot-rolled wide strip steel in particular being almost impossible to predict due to the ongoing market dynamics. 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. For this reason, since July 2021 we have implemented a variable surcharge in order to be able to maintain our ability to deliver.

Basis for the Determination

The steel price development for 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. This review takes place once a quarter.

Current Price Development and Trend

The latest report from the Stahl Monitor shows a downward movement in the price of hot-rolled wide strip steel. We would like to pass this positive price trend on to our customers: 

The surcharge will be reduced to 0% as of August 1st, 2023, and therefore will initially cease to apply in full.

Nevertheless, price developments on the German steel market remain overall volatile, and prices on the international raw material markets also continue to fluctuate. Consequently, price developments must continue to be monitored carefully and appropriate measures evaluated in the event of a renewed deterioration in the situation on the steel market.

External influences on the surcharge

The extremely volatile German steel market and fluctuating prices on the raw material markets impact the determination of the surcharge. At the end of 2022, the steel prices were at a lower level than they were at the beginning of the year, but they started to rise again at the beginning of 2023. The reasons include, in particular:

  • Fluctuating Chinese export and production costs
  • The effects of the Russia-Ukraine Conflict.

The steel market is facing the challenge of replacing a significant amount of steel that previously came from these countries.

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.

Since March 2023, the energy price cap has been in effect, which is dampening the significantly increased costs of energy, leading to a positive impact on the cost situation of our suppliers. We would like to pass on the resulting cost advantages in the steel market to our customers.

Amount of the Surcharge

The basis for determining the surcharge on a rotational basis is the current index for hot-rolled wide strip steel at the reporting date, as described above. In the following graph you will find the threshold values for the calculation, related to bimetal band saw blades. With this approach, we are ensuring that price reductions on the raw materials market are also passed on to you on a regular basis.

Illustration 1: Example of a calculation of a surcharge for bimetal band saw blades
Illustration 1: Example of a calculation of a surcharge for bimetal band saw blades

The confirmed delivery date is decisive for the calculation.

Next steps

We will continue to communicate transparently. We will keep you informed in the future with regular updates, review steel prices, and make the necessary adjustments accordingly.

Please contact your sales representative if you have any questions.

Any more questions?

We are happy to answer your questions, feel free to contact us!

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