Fig. 2. Prices for Brazilian casting grade pig iron increased drastically in 2008, but prices have become more steady in recent months.


leading to a loss. Most customers prefer more stable pricing and seek longer surcharge terms, such as quarterly or annually, but this requires a forecast to be made by the metalcaster of what the price for scrap will be, unless it can


secure a longer term agreement from scrap dealers.


How might a basic surcharge be figured?


In a basic example of a surcharge, a


metalcaster first receives a scrap price, in this case based on No. 1 busheling in the Chicago market, and the delivery and processing formula for the sec- ond week of the month. (Metalcasters generally do not use the first week


30 Metal Casting Design anD PurChasing


MarCh/aPril 2010


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