Wire along the value added chain:
Our product range is manufactured from high carbon wire rod. This is formed from a billet, namely by passing the billet through two rotating tools known as rollers in the steelworks. Wire drawers draw the wire rod until it has the diameter requested by the customer and the wire surface is manufactured at the same time. The customers of wire drawers are companies that go on to remodel the drawn wire themselves (e.g. by bending it). This results in bending parts, springs, screens and grids. Finally, these remodelled products reach the end customer, which uses the remodelled wire for its applications.
One decisive aspect in the wire process is the reliance on the commodity markets. The steelworks obtain ore, coal and scrap. Over the past few years, the prices of these commodities have been subject to even stronger and more short-term fluctuations. This volatility is a considerable burden for the entire sector, making it more and more difficult to plan business relationships.
There are problems along the value added chain resulting from the different sizes of the market participants. The wire drawers are somewhat sandwiched between a small number of large steelworks on the one hand and a small number of equally large automotive manufacturers, the main source of demand, on the other. This means that the prices are set by the steelworks and the end customers, with little attention being paid to the costs involved in the value chain of the wire drawers. As a "polypoly", wire drawers and remodelling businesses are forced to accept this situation.
No steel is the same.
There are many types of steel. The Künne Group mainly processes high carbon wire rod. This type of wire accounts for a relatively small proportion of global production, meaning that the number of suitable suppliers is limited. The steelworks require special technology before they can manufacture this product.