Prices rise sharply with triple-digit hikes / Converters prioritise volumes over price / Hybrid contract models emerge

The war in the Middle East dramatically altered the starting position for last month’s price negotiations, and changed the buyer’s market to a seller’s market. Apart from that, March was widely considered a transitional month, with the full extent of the upward price pressure not yet entirely clear.

Many quarterly contracts were reopened and, together with the monthly agreements, recorded triple-digit rises. In response, converters are seeking to minimise the price volatility through a hybrid procurement strategy – quarterly contracts with some suppliers and monthly contracts with others. They are aiming to balance price stability with operational flexibility. It remains to be seen whether this hybrid model will gain wider traction and whether it will be effective in slowing down the price rises.

Looking ahead to April, little change is expected in the underlying market conditions, namely tight availability and stable demand due to ongoing efforts to secure volumes.

One notable aspect is that many producers have, in view of the uncertainties on the market, tightened their payment terms – in some cases from 120 days to 30 days. In addition, producers are increasingly seeking to implement energy cost surcharges. Both measures are likely to place further financial pressure on converters.

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