Steel Prices Continue To Rise
Many manufacturers are calling the steel crises the worst they have seen in their careers, or at least since a similar steel spike in the early 1970s. Although the price of scrap steel has begun to show some signs of decline, the crisis in steel prices and availability continues. While gasoline price increases dominate the news, steel prices are still getting attention in Washington.
Factors for the price increase of steel include strong foreign demand, most notably from China, for hot-rolled steel (a basic sheet product used by many industries); improved domestic demand for hot-rolled steel; high ocean freight rates for imported steel; a weak U.S. dollar that makes imports more costly; and the continuing consolidation of U.S. steel manufacturers.
Steel prices are expected to keep surging, and some steel customers expect prices for hot-rolled steel to hit $500 to $600 a ton next month, up from about $330 in January.
Recently, Rep. Joe Knollenberg (R-MI) and other Michigan lawmakers asked the Department of Commerce to investigate the unusual increase in steel prices. The congressional delegation is asking that the Department of Commerce investigate the price increases to determine if they are the result of free-market events, such as increased global demand and a shortage of raw materials, or if any improper market manipulations have occurred.
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