Corus warns of significant cost pressures, further impacting wire rod prices
12 Mar 2008
Following a statement on 29th Feb that wire rod prices in the UK will increase by £70 - £90 per tonne on deliveries from March 31st, Corus today warned that higher coal prices will push wire rod prices substantially higher for deliveries from April 28th.
Corus has taken this step now in an effort to provide as much information as possible to the supply chains, which it serves.
Coal supplies are extremely tight on international markets and stocks at many steel makers are being depleted to dangerously low levels. Floods and port congestion in Australia have resulted in several mines declaring ‘force majeure’ on coal shipments and some steel makers have already started to cut back production due to inadequate supplies.
Latest international spot prices for coal and coke have surged to US$300 per tonne fob and $510 per tonne fob respectively. This compares with contract prices for coal in 2007 of c. US$100 per tonne fob. Contract prices in 2008 for metallurgical coal have yet to be settled.
Corus is currently unable to specify the level of the further price increases at this stage due to the uncertainty of purchase prices for coal. Corus endeavours to communicate this as soon as possible to customers as it is recognised that price increases will need to be passed through supply chains in the wire industry to end users.
Customers who require further information to support this process can contact their normal Account Managers in the Wire Rod business.
Corus is Europe's second largest steel producer with annual revenues of over £11 billion and a crude steel production of about 20 million tonnes. With main steelmaking operations primarily in the UK and the Netherlands, Corus provides innovative solutions to the construction, automotive, packaging, mechanical engineering and other markets worldwide. Corus is a subsidiary of Tata Steel, the world's sixth largest steel producer. With the recent acquisition of Corus, the combined enterprise has an aggregate crude steel production capacity of around 28.1 million tonnes with approximately 82,700 employees across the four continents.
Ends
For further information, please call:
Annanya Sarin, Corporate Relations Tel. +44 (0) 20 7717 4532
