Fig. 1. Prices for Chicago No. 1 steel busheling began showing major fluctuations in 2008.


such as casting grade pig iron do not have any published values and must be based on actual prices being paid. Differences in surcharges that include pig iron are driven in part due to delivery distance, volume purchased and length of contract.


What’s the duration of a surcharge? Customers and metalcasters must


come to some agreement as to the duration of the surcharge. The most accurate method for determining and executing a surcharge is to see what the


metal pricing is and pass that amount along the following month. However, if the price goes up significantly (say, $100/ton in a month), the metalcaster would be carrying the additional cost until the new pricing takes affect, re- ducing its profitability and potentially


MarCh/aPril 2010


Metal Casting Design anD PurChasing


29


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