Electric Power. Between 1956 and 1959, the U.S. decreased somewhat its unit cost for electric power relative to Japan; but from 1~59 throu...
Electric Power. Between 1956 and 1959, the U.S. decreased somewhat its unit cost for electric power relative to Japan; but from 1~59 througn 1~71, the trend was clearly one ~f Japanese improvement relative to the U.S. The improvement in Japan's position was primarily due to decreased relative pur- 0 cnases by Japan. The relative price trend was mixed over the 1959-71 period. The relative price for the U.S. fell through 1964, was steady until 1968, and rose a!8i~ until 1971. From 1971 through 1974, the U.S. relative price fell rapidly enough to offset its increasing relative purchases anã the U.S. enjoyed aeclining relative unit cost for electric power.
The Japanese position improved somewhat in 1975 as it continued reducing unit purchases relative to the U.S. and its price increased by less than that of the U.S. There was a slight decrease in U.S. relative unit cost in 1976 due to a relatively small rise in the U.S. price. Other Energy. U.S. unit cost for non-COking coal has been an extremely small part of total unit costs over the entire per ioà . It was a slightly more important component of Japanese costs in the 1950's but had been eliminated as a cost item by the mid-1960 i s. We have assumed natural gas usage only for the U.S. ".j Total Cost. For the costs we have studied, the dominant trend from the beginning of the period through 1972 was an increase in U.S. unit cost relative to that of Japan. There -124- were periods in which this trend was quite weak--1968 through 1971 and 1962 through 1965. There were even years in which the U.S. significantly improved its relative cost position as compared to the previous year--i .e., 1957 and 1961. But the trend of rising relative cost for the U.S. was clear. In 1973 and 1974, there were sharp improvements in the relative cost position of the U.S. The devaluation of the dollar relative to the yen undoubtably contr ibuted to thi~, r~versal of trend. These improvements returned the relationship between U.S. and Japanese unit costs very close to that existing from 1962 through 1965. In 1975 and lY76, the U.S. relative cost increased, near ly el imina t ing the ga ins of the pr eceed ing two year s but staying slightly below the 1972 level. This historical pattern of relative steel cost is compared to the pattern of Japanese steel import penetration after the following discussion of relative steelmaking costs in Europe. III. THE UNITED STATES AND THE EUROPEAN COMMUNITY
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