Steel Price Hikes Continue in 2004

Jason Sandefur

Steel prices soared again in 2004, driven by continued demand from China and automotive insiders predict more steel price increases.
The price of low carbon industrial quality wire rod rose 66.2% during the first 11 months of 2004 to $615 per ton, according to the trade journal American Metal Market.
The price of low carbon cold finished steel rod rose 72.2% to $620 per ton, while cold working quality steel increased 59% to $740.
High carbon industrial quality steel rod gained 76.3% to $670 per ton, while high carbon cold working quality steel prices jumped 50% to $720, according to figures published by AMM.
Many large steel companies are reporting record profit in 2004, even as raw material prices rise. Price forecasts for coking coal, a key ingredient in steelmaking, have soared recently, driven by high demand and tight raw material supplies. Nippon Steel of Japan reportedly signed a new agreement for coking coal at more than twice the $57 a ton price it paid during 2004. The $125 per ton price is more than 13% higher than the $110 mark most industry analysts expected in 2005.
Auto industry insiders predict more steel price hikes loom, with projections ranging from 15% to 20%. According to Automotive News, the Chrysler group has agreed to pay about 20% more on some of the steel contracts it negotiated this summer, industry sources say.
American steel mills are demanding and getting price increases of 15% to 20%, steel analyst Charles Bradford told Automotive News. Such increases add about $120 to the production cost of a typical car a cost U.S. automakers are currently unable to pass on to customers. \�2004 FastenerNews.com