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Steel Abrasives

Related Lawyers: Andrew Bullion, Anthony Maton, Laurent Geelhand, Anna Morfey, Tom Bolster, Amandine Gueret, Charles Laporte-Bisquit
Related Practice Areas: Competition Litigation

In April 2014, the European Commission (“EC”) fined a group of steel abrasives producers a total of €30 million for participating in a price-fixing cartel between 2003 and 2010.

The Cartel

The EC found that Ervin, Winoa, Metalltechnik Schmidt and Eisenwerk Würthagreed agreed to coordinate prices for steel abrasives in Europe and not to compete against each other on price with respect to individual customers.

The EC Decision concerned Steel abrasives, which are loose steel particles used for cleaning or enhancing metal surfaces in the steel, automotive, metallurgy and petrochemical industries. They are also used for cutting hard stones such as granite and marble. Metal scrap, which is the main raw material for steel abrasives, is characterised by sharp price fluctuations as well as significant price differences between the EEA countries. In order to compensate for such fluctuations, the cartelists imposed a specific surcharge (called the "scrap surcharge" or "scrap cost variance (SCV)") which was based on a common formula. Essentially, when energy prices rose sharply in 2008, the cartel members agreed that they would all introduce at the same time an "energy surcharge" or "energy complement" to compensate for price fluctuations.