Engineering

Management report on the Group
2.2 Management report on the Group Consolidated results of operations
Nickel prices
London Metal Exchange
in 1,000 US dollars/metric ton
30
25
20
15
10
Oct
2009
Sept
2011
Capesize ships are too large for for the the Suez
and Panama Canals and therefore have to to
sail round Cape Horn and the the Cape of of Good
Hope. Good Hope.
68 | 69
For our Stainless Global business area the alloying metals nickel, ferrochromium and ferromolybdenum are
of foremost importance – as primary raw materials and as components of stainless steel scrap. The monthly
average price of nickel on the London Metal Exchange was between 20,392 and 28,252 US dollars per ton.
For ferrochromium from South Africa the quarterly price increased initially to 1.35 US dollars per pound
(around 0.45 kg) before slipping to 1.20 US dollars. Quarterly prices for ferromolybdenum fluctuated
between 36.57 and 43.45 US dollars per kilogram.
The price of zinc – used to coat carbon steel – fluctuated enormously and averaged around 2,400 US dollars
per ton, 7% above the prior-year average.
Prices for manufactured products mirror raw material prices
For manufactured products strongly dependent on raw material prices – e.g. steel components for
machinery – the prior-year trend with in some cases steeply climbing prices continued. This effect was
particularly drastic for products containing rare earths, for example permanent magnets in drives and
electric motors used in the elevator industry.
The materials market moved in short-term cycles. After coming under considerable pressure at the
beginning of the fiscal year, prices rose sharply up to the middle of the year and subsequently softened
slightly. The main factors behind this trend were raw material costs and the euro/US dollar exchange-rate
effect, which at times benefited imports from Asia. In this situation our trading operators made short-term
arrangements and consolidated and optimized purchasing volumes in some cases on a cross-country basis.
The plant construction procurement markets stabilized considerably. As many of our suppliers had a full
workload, delivery times increased but supplies remained secure. There was only a slight increase in prices
for capital goods.
Rise in freight costs halted
For the maritime transport of bulk goods, increased cargo space became available. This was particularly
true of capesize ships, the bulk carriers generally used for the shipment of iron ore and coal. For container
shipments, too, more than enough ships were available. This halted the rise in freight rates and in some
cases led to reductions. However shipment times increased, with ships often reducing speed to save fuel.
Road haulage freight space in Germany remained tight due to the absence of capacities taken out in the
crisis. Freight rates were therefore higher in particular for shipments at short notice. Rail capacities were in
similarly short supply.