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In mid-December, Nucor,
Weirton, O’Neil Steel and other major U.S. Steel
producers announced their plans to implement “raw
material surcharges” for all mill shipment beginning as
early as January 1, 2004. These surcharges reflect the
dramatic pricing volatility in today’s steel market. The
current volatility is caused by:
- A supply demand
imbalance world wide with China buying much of the
available supply and U.S. mills, with reduced
capacities, struggling to meet local demands.
- A weak dollar (40%
erosion in value to the Euro in the past 24 months)
which acts as a deterrent against imports, even
without the tariffs.
- Skyrocketing prices
for raw materials and other inputs used in steel
making.
Several of HCM’s
suppliers have now instituted these “steel surcharges”
effective immediately. Our suppliers have assured HCM that
reasonable notice will be provided as these commodity
prices fluctuate. The situation is fluid and HCM is unable
to forecast these changes. HCM will include the most
current charges to proposals submitted. HCM plans to
update the current charges for the “steel surcharges”
every 30 days and will disclose this information to our
customers as soon as it becomes available to us. There has
been much speculation on the duration of this shortage of
raw materials. Most HCM suppliers agree these charges will
be in place for the first quarter of 04 at a minimum.
HCM regrets the need to
apply this raw material surcharge and will remove it as
soon as our suppliers and conditions allow. If you have
questions regarding this please contact me at 630.734.1093
x 150.
HCM is committed to
supplying the highest level of service and delivering a
cost effective solution to our customers. Thank you for
your continued support of HCM Systems, Inc product and
services.
Sincerely,
HCM Systems, Inc.
Charlie Hillebold
President |
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