Sandvik Materials Technology, Product Area Wire, said it has reviewed its alloy surcharge model for stainless steels, and plans to change it in two ways.
Time Lag

First, Sandvik said it will reduce the time lag in its alloy surcharge from 75 days to 45 days to improve the overall management of the surcharge and to reduce the risk that is associated with the longer time period. This reduction in days, that is, cutting the lag time between the market alloy prices and its alloy surcharge, will result in a closer correlation between material prices and surcharge.
The company said the change will apply fully from February 2009 when the rates from December16 to January 15 will be debited.
Copper and Titanium
Secondly, Sandvik saie it will introduce copper and titanium in its surcharge model as other major wire producers do.
Sandvik established the current European alloy surcharge model for its stainless steel products in 1993 to reflect fluctuating alloy material prices. Once calculated, the alloy surcharge is added to the base price of stainless steel. The source of the individual alloy rate is taken from Metal Bulletin’s, LME, average ‘midday’ rate.
Sandvik’s alloy surcharges for stainless steel wire products are published monthly on the web at http://www.smt.sandvik.com/wire.