NEWS BRIEFS
Australia Floods Swelling Steel Prices

Extreme flooding in Australia is forcing spot prices for coking coal to surge, Crain’s Detroit Business reports. The hike is pushing steel prices higher in a market already challenged by rising consumption in China and a weaker U.S. dollar.
 

In the past two months torrential rains in Australia’s Queensland state have inundated more than 20 towns and cities, threatening about 200,000 residents. 
 

The floods have closed 50 mines and a major shipping port, causing a shortage of coal exports to the rest of the world. Australia accounts for about two-thirds of global coking coal trade and Queensland produces 90% of Australia’s share, according to Reuters. 
 

Crain’s reports hot-rolled steel has increased to $800 a ton from $530 in November. In some cases steel jumped $60 a ton overnight.
 

Mine operators say it could take up to six months to pump out all the water. That’s if it stops raining.

Automotive fastener supplier Alpha Group of Cos. in Livonia, MI, has seen its steel prices rise from $34.95 a pound in November to $40.90, according to Crain’s. The company buys 1,500 to 2,000 pounds a month.
 

Alpha COO Chuck Dardas said price hikes hurt his company because orders can take a month to fill, making it impossible to set prices for customers.
 

“We don’t have a perfect mechanism to recoup our costs,” Dardas told Crain’s. “We’re in a position to weather this if it’s a short-term situation, but we’ll get beat up financially in the interim.”
 

Since the recession, Alpha has been unable to buy ahead in the market, Dardas said.
 

“You have to have the liquidity to do that, so it’s not like we can go out and buy right now.” ©2011 GlobalFastenerNews.com

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