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The price progression seen for raw materials like ore fines, copper, nickel, zinc and aluminium in recent years is spiralling out of control. For example, the price of ore fines has nearly quadrupled since 2003. In the wake of steel producers being forced to conclude new contracts for iron ore with a 65 % price increase at the beginning of the year, they are now starting to pass these higher prices on to their customers. In addition, there has been a concurrent and signifi cant rise in oil prices and associated energy costs. With the huge demand for raw materials showing no sign of decreasing, there is also no reason to expect the market to level off again in the foreseeable future. Many steel producers already implemented a preliminary round of price modifi cations during the fi rst quarter of 2008. A further increase of at least EUR 200 per ton scheduled for July is now set to impact even long-standing contracts since existing annual agreements have already been terminated.
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We have been keeping a close eye on this development for a long time and in response have undertaken a range of impressive investments into research and development as well as cutting-edge production processes. Moreover, Vossloh-Schwabe has developed a variety of new, materialoptimised devices as a means of at least partly cushioning these increases in raw material prices. Nonetheless, to cover these higher raw material and energy costs, maintain our own high quality standards and retain our integrity in the responsible provision of durable and reliable products, we are now left with no other option but to adapt our prices for magnetic ballasts. We feel confi dent you will appreciate this is a necessary step on our part to guarantee we can continue developing and manufacturing topquality and durable products ‘Made by Vossloh-Schwabe’. In a similar vein, please rest assured that our global reputation for operating a fair pricing policy, of which we are justly proud, will remain unaffected by this measure.
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