Tata Steel, formerly known as Corus, has had to raise the cost of the scrap surcharge at its speciality plant in Sheffield to £202 per tonne following an error in the data used to calculate the charge.
The rise will only affect those deliveries made from 3 January to 12 January but raises it by £5, from £197 per tonne. However, it will mean the surcharge will now be backdated to these companies.
A statement from the plant’s commercial manager Richard Bell said: “I realise that a surcharge modification should not be taken lightly and may cause some internal issues for you our customers, however we have decided on this occasion that we need to take action to correct a genuine error. We are clearly working to ensure that a similar error does not arise again.
“The scrap market remains highly volatile currently and we are experiencing continued strong increases in the cost of scrap, which has exacerbated this issue.”
The error was made when the calculations for the surcharge did not include December scrap prices from a major contributer, so some old data from November was used in its place. The contributer only recently submitted the up to date numbers.
The scrap surcharge is a payment made to the steelworks when someone places an order for materials. The surcharge boosts the base price of steel, which covers the manufacturing costs at steelworks. It is primarily placed upon steel shot and steel grit.