A socially-distanced mating season means that contract negotiations in the minor metals, ores and alloys sector will look very different this year. Here, Fastmarkets' team considers the backdrop to the 2021 contract discussions.
Seeking flexibility...
Concern over the second wave of Covid-19 infections sweeping across Europe was an example of the uncertainty that negotiating parties will try consider in their discussions for next year. Ferro-chrome consumers, for example, have been increasingly cautious about the volumes they are willing to commit to buying.
Additionally, consumers who would usually look at this year's usage as a guide to their requirements for the following 12 months have turned to 2019's numbers instead.
"It's very much a guessing game. What we see now is the acceptance that we are going to have to live with the virus," a ferro-chrome producer said.
"We continue to secure our long-term contracts, and our European customers have cut their forecasts by 15-20% for 2021, compared with 2019 - not 2020," he added. "However, they still also want the capacity to buy at 20% higher than 2019 levels."
...But also...