According to Wall Street Journal, citing people familiar with the matter some auto makers are threatening to fight surcharges steelmakers are trying to impose on agreed supply contracts in a bid to curb the impact of spiking steel prices and bolster their weak finances.

They told the paper that the auto makers are looking to fight the additional charges in court, saying that financial terms of a contract cannot be altered. It did not say which auto makers planned such action.

The paper said both sides agree that the price in the next cycle of negotiated contracts will be significantly higher than in previous contracts, owing to higher costs for raw materials such as iron ore and higher energy prices.

Auto companies, reeling from rising fuel and raw material prices, the credit crunch and the housing market downturn, are trying to cut costs and shore up capital levels while steel prices have soared as increased demand from rapidly developing economies like India and China is outstripping supply.