Posted on 03/08/2002 6:02:50 AM PST by 11th Earl of Mar
| » Advertise With Us |
Business News Steel users brace themselves for higher prices Thursday, March 07, 2002By Barbara Wieland
Steelcase Inc. chose its name for a reason. The country's largest furniture manufacturer goes through more than 200,000 tons of steel a year, said Brian Van Dommelen, leader of corporate steel services for the Grand Rapids-based company. Steel is the single largest commodity the company buys. So it is no wonder that Steelcase has turned a wary eye toward the tariffs President George Bush recently slapped on imported steel. The tariffs, ranging from 8 percent to 30 percent, could have a major impact on Steelcase's business. But how much of an impact remains to be seen, Van Dommelen said. Other steel users in the area also wonder how the tariff decision will affect business. Some have already seen steel prices increase. Others worry that foreign steel producers will shy away from the American market, causing a steel shortage. Part of the steel users' uncertainty rests on the complexity of the tariff decision. Some steel products will be exempt from the tariffs while others will see large price increases. And it is too soon to know how steel manufacturers, both domestically and abroad, will respond to the tariffs. Steel users may be unsure about future steel prices, but steel producers are not. Steel users such as Haworth Inc. and GR Spring &Stamping already see higher prices. The tariff could increase steel prices 20 percent at Holland-based office-furniture maker Haworth, spokeswoman Beth Parenteau said. She said 20 percent of Haworth's yearly purchases are for steel, not including components bought from suppliers that include steel. Steel prices have gone up at GR Spring &Stamping, too, President Jim Zawacki said. "Even before Bush made the decision, our suppliers started ripping up the contracts," he said. "They said they can't honor them anymore, that prices would go up." Normally, GR Spring &Stamping signs one-year contracts that lock in steel prices. The company, which stamps out metal parts and makes springs, uses 20 million pounds of steel a year. "We felt we've been let down," he said. "We didn't expect anything over 10 percent. This will raise our costs substantially." That cost might be high enough to prompt some manufacturers to leave the country, said Andrew Samrick, executive vice president of Mill Steel Co. His Grand Rapids company buys steel in bulk and cuts it down to size for office furniture, automotive and appliance manufacturers. Higher costs of production have induced some businesses to leave West Michigan before. That happened when LifeSavers decided to leave Holland for cheaper sugar prices in Canada, he said. Now, both Canada and Mexico might have cheaper steel than the United States. "With higher steel pricing, we'd expect those places to become far more enticing," he said. Samrick hasn't heard any local companies talk about leaving, but the topic has come up in industry trade association talks. "What could be done to prevent that happening? I honestly don't know," he said. Another steel distributor, Anderson Metal Service in Grand Rapids, thinks the tariff decision could further hurt the ailing tool and die industry. Anderson Metal sells steel to local tool and die shops, which make the dies manufacturers use to stamp out metal parts. Even before the tariff decision, many manufacturers were lured by cheaper prices offered by overseas tool and die shops. Now that the steel used by American tool shops will be higher, more manufacturers could opt to send their business abroad. Dan Anderson, president of Anderson Metal, also thinks the tariffs could lead to steel shortages. "There could be fewer foreign steel makers willing to sell to the U.S.," he said. "There's been talk about the possibility of steel allocations, where (steel) mills dictate how much steel is available to any company." Those shortages could push steel prices up even further, he said. It's still too soon to know if any of those scenarios will become reality, Anderson said. But it's something he and other steel users will watch in the weeks to come. "We'll have to wait to see how far-reaching it will be," he said. Press Reporter Rob Kirkbride contributed to this report.
|
The other side is that a lot of steel is recycled. It's not really consumed, just rented.
|
|
(million metric tons) |
(thousands) |
(tons/employee) |
| Australia |
|
|
|
| Austria |
|
|
|
| Belgium |
|
|
|
| Brazil |
|
|
|
| Canada |
|
|
|
| Finland |
|
|
|
| France |
|
|
|
| Germany |
|
|
|
| Italy |
|
|
|
| Japan |
|
|
|
| Luxembourg |
|
|
|
| Netherlands |
|
|
|
| South Korea |
|
|
|
| Spain |
|
|
|
| Sweden |
|
|
|
| United Kingdom |
|
|
|
| United States |
|
|
|
Todd, Willie gets like that when you're smacking him over the head with his own box of rocks.
I say bring it on, sell us your stuff cheap. I don't see why we should follow their stupid example.
These are the same people that defend farm subsidies. If the people of another nation did to our agriculture what we are doing to their steel, we might as well cut their government a direct check c/o the us taxpayer.
Constitutional, but unwise.
I look at OPEC and I can easily imagine OSEC and I don't like the looks of either one.
What were the results ofReagans tariffs in the early 80's? That is a precedent for what Bush is doing.
Do you ride a Harley?
(I just noticed that the links to the data are out-of-date.
It's still available at the site, just in a different subdirectory.
I'll have to remember to update that before I post the chart again.)
Actually, World agricultural tariffs today average about 62%...
but we all know that you never let facts interfere with your line of BS.
You're exactly right. He saved Harley as we know it. It is/was a precedent, however a bad one. As much as I love Harleys, it is hardly a national security resource.
Link Please.
OK: Why Trade Promotion Authority is Needed for Agriculture (Scroll down to #8)
We'll have to see how long it lasts. LOL
You were so close Willie. If they raise our prices it's bad. We agree. If we raise our prices it's good?
You lost me again.
Willie, tell me the difference again between foreign countries raising our costs and us raising them.
Please, the difference is that there are substitutes for steel. Try running your car on ethanol.
What about beer? I wouldn't want a foreign producer to jack up the price. Could be grounds for war.
Why doesn't the government protect the breweries?
Reagan signed tariffs into law to protect the steel industry. You're right, no recession ensued. That doesn't mean it was a good idea either.
The purpose was to protect the industry so it could modernize and then the protection could end.
Well, they didn't modernize enough and their costs are still too high.
You sound like Rocky the Squirrell "This time for sure"
The "unions" have killed our country.
When people on strike can turn away from the bargaining table after being offered 37% increase in wages, then who can blame the corporations for moving to another country where they can hire workers at .60 to 1.00 an hour...
We're a "GREEDY" country, and,we don't want to sacrafice a penny out of our own pockets.
DL
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.