[TheForge] steel price going up

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Steel Prices Jump, Spurring Protests =46rom Customers
  Friday, January 23, 2004 12:29 AM ET
     =A0
Steel companies are passing on double-digit price increases to their=20
customers, prompting protest from buyers, including  General Motors=20
Corp. (GM, news), about both the pace of the run-up and the addition of=20=

supplemental surcharges to existing contracts, Friday's Wall Street=20
Journal reported.

While the increases are most intense in the U.S., prices are rising=20
around the world. In  China, steel prices rose 20% for some products in=20=

the past year, while prices for exported Japanese steel increased 13%.=20=

South Korea-based Posco (PKX, news) this week said it would raise=20
domestic prices of hot and cold-rolled steel products 14% starting =20
Feb. 9. Prices in  Europe are flat compared with a year ago, but are=20
expected to rise this year, according to independent New York-based=20
analyst  Charles Bradford.

  China's demand has boosted steel prices much as they have boosted=20
those of other raw materials, from other metals to energy to cotton.=20
Chinese consumption rose 30% last year, and the fast-growing nation now=20=

consumes one-third of the world output of rolled steel. Rising raw=20
material, energy and shipping costs also have prompted the rise.

  In the U.S., the weak dollar is playing a role, limiting the=20
purchasing power of American customers to buy steel from foreign=20
producers, thereby safeguarding the rising prices of U.S. steelmakers.=20=

Ocean-shipping rates have more than doubled in some markets in recent=20
months, sheltering domestic supply and demand in many markets around=20
the world. Prices for iron ore, a main ingredient in steelmaking, are=20
rising 19% in some cases.

  In the U.S., steelmakers boosted first-quarter prices on benchmark=20
hot-rolled steel to between  $350 and  $370 a ton, averaging to a 12%=20
increase from the December price of  $320 a ton, according to Merrill=20
Lynch analyst  Daniel Roling. Higher prices are also slated for the=20
second quarter.

Higher steel prices have sent steel stocks rising, in some cases to=20
52-week highs, and prompting some analysts to raise 2004 earnings=20
expectations for some companies.

Wall Street Journal Staff Reporter  Paul Glader contributed to this=20
report.

Dow Jones Newswires
  01-23-04  0029ET

Copyright  2004 Dow Jones & Company, Inc.   All Rights Reserved.=20
                      =20=