2017 Integrated Report – Departure into a new era

Procurement and energy market

Scope: price trends on procurement markets, full auctioning of CO₂ certificates

Purchase prices for raw materials, energy and transport services vary according to market conditions.

We respond to the risk of increasing energy prices among other things by using appropriate derivative financial instruments and entering into long-term procurement contracts. However, these safeguards also limit opportunities arising from trends in energy prices. In the event of falling prices, we do not participate in the market development.

This means that depending on the market and competitive situation, it may not be possible or may only be possible to a very limited extent to pass increased costs on to the customer in the short term. This in turn has a negative impact on margins. The consolidation of demands and optimization of procurement processes create opportunities to leverage further potential in terms of procurement prices.

Noticeable train-path price increases outside of Germany result in significant increases in costs for the use of infrastructure. Due to the intensity of competition, it is not always possible to pass on cost increases.