ArcelorMittal Dofasco which is located in Hamilton, Ontario, Canada put out a price letter under the signature of Brad Davey, Vice President of Commercial. The letter, which was addressed to their sales & marketing employees, outlined specific base price levels to be charged for their flat rolled products.

Their price letter, a content of which is shown below, references cost as the reason for their increase.

AM Dofasco is now the second mill in North America to come out with specific base prices vs. a blanket dollar per ton price increase over and above whatever base price is used as a beginning reference point.

Here is a copy of the letter:

Flat Rolled Product prices have fallen to levels that are unsustainable relative to our costs of production. Steelmaking costs over the past several months have either not decreased or have only decreased marginally versus the market price erosion. As we open our books for January order acceptance, it is essential that we adjust pricing to levels that begin to capture the value for our products, while being mindful of exchange rate fluctuations.

Hot Rolled Product Base: $33.00 CDN per cwt

Cold Rolled Product Base: $38.50 CDN per cwt

Galvanized Product Base: $39.00 CDN per cwt

Galvanneal Product Base: $39.50 CDN per cwt

Galvalume Product Base: $40.00 CDN per cwt

Please apply the full extras as outlined in the ArcelorMittal Dofasco Price Book dated January 1, 2010 and the coating weight tables dated January 3, 2011.

We reserve the right to re-quote any previously quoted offer that is not confirmed with either an ArcelorMittal Dofasco order acknowledgement or written acceptance by both parties.

Please advise your customers that our books for January delivery are now open.