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What's in store from Santa Surcharge in December?

22nd December 2021

Ho Ho Ho, and a Merry Christmas to you all.
Let’s open up our presents and see what 'Santa Surcharge' has brought us in December.

Despite some reductions over the last two months, scrap surcharges have returned to previous form delivering us an increase of £18/tonne. Now back up to £381, this is still £27/tonne below the peak we saw in August 2021.

The other big mover in December has been the Chromium surcharge. It has continued its surge, increasing a further 30% from November to December. Over the course of the year, Chromium surcharge has now increased a whopping 218%. This has hit grades such as 722M24 (EN40B) the hardest, where the Chromium Surcharge alone on this grade now sits at £258/tonne.

722M24 Surcharge - December 2021

The Nickel surcharge has seen incremental increases over the last six months and continues this pattern with a 5% increase into December.

Overall, with all surcharge movements combined, the most impacted grades in December are 722M24 (EN40B) up £81/tonne and 655M13 (EN36) up £60/tonne. And to a lesser degree, 817M40 (EN24) and 709M40 (EN19) which have seen increases of £53/tonne and £39/tonne respectively.

And like the gift that keeps on giving, or arguably more akin to a bad penny, the biggest impact to global mill prices at the moment continues to result from energy costs.

Mills are applying unforeseen increases, either in the form of base price increase or separate energy surcharges, to steel orders with immediate affect. These increases have started being applied to goods received into the UK from November 21 onwards and uplifts are in the region of £100-250/tonne, dependant on production routes and methods.

As both natural gas and electricity wholesale prices continue on an upwards trajectory, it’s believed these ‘energy’ increases will be around for some time, and potentially may present further increases into next year.

Be assured we will continue to keep you updated on all surcharge news (and surprises) in 2022.

That just leaves me to wish you all a happy and safe Christmas break.

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