Change in alloy surcharge calculation method for flat products from Outokumpu and other manufacturers in June and July 2022.


It may have been noticed that Outokumpu's June alloy surcharge was lower than would have been expected based on raw materials. Has there been a change in alloy surcharge calculation for flat products from Outokumpu?

As an alloy surcharge forecasting service, having recursively reconstructed the manufacturer's calculation formula very accurately, we are able to detect any deviations from this formula by the manufacturers. Our simulation accuracy is on average 99.4% for Outokumpu, i.e. any deviation above about 1% can be considered as a change in the calculation formula. Such changes happen very rarely, in our experience only every few years.

Why do we think that Outokumpu has made a change in alloy surcharge calculation method for flat products in June and also in July 2022?

To show the impact of Outokumpu's alloy surcharge changes, I will give two examples for the June alloy surcharge:

1. Ferritic material (without nickel) 1.4016: our forecast according to the old calculation formula: 1.40 €/kg, Outokumpu official: 1.36 €/kg, deviation of our forecast: +2.8%.

2. Austenitic material (with nickel) 1.4301: our forecast: 3.77 €/kg, Outokumpu official: 3.22 €/kg, deviation of our forecast: +17.5%.

We can see very clearly that the main change in Outokumpu's calculation method was related to nickel. The nickel average value for the June observation period of $30,400/t would have had to decrease by 23% to $23,400/t to get Outokumpu's original value according to the old calculation method. This is completely implausible.

Therefore, we believe that Outokumpu significantly increased the so-called reference value for nickel within the calculation formula, so that the alloy surcharge became lower.

The reference value is deducted from the base value and reduces it for the calculation. A detailed explanation of the calculation method is presented on our homepage (link).

In July, Outokumpu partially reversed the change in the reference value from June, so that currently the alloy surcharge is still calculated slightly lower than in the months before June.

We do not know the background of these interventions in the calculation of the alloy surcharge and they are not mentioned in any official statement by Outokumpu.

However, it should be kept in mind that the alloy surcharge is a price component that has no claim to neutrality and objectivity. It may be arbitrarily changed by the manufacturers at any time.

Kostenloses Schnupperangebot

Testen Sie unser Angebot 6 Wochen kostenlos & unverbindlich im Rahmen unseres 6-Wochen-Tests.