The activity seems to be taking place on a broad front but with no specific pattern. 21/ In the first quarter of 1971, demand improved sli...
The activity seems to be taking place on a broad front but with no specific pattern. 21/ In the first quarter of 1971, demand improved slightly over the fourth quarter of 1970; buyers began hedge buying against a potential steel strike on August 1, 1971. Nonetheless, some limited and selective price shaving continued through to March of 1971. After the imposition of the voluntary quotas on steel imports in 1969 (which were on a tonnage basis), foreign steel mills began shipping a larger share of the higher pr iced spec ial ty steels. Stainless stee 1 proãucers felt the pressure of imports longer than the carbon steel producers and two efforts to raise stainless steel prices fell flat.
22/ Joslyn Manufactur ing Company failed in its effort to lower stainless steel discounts from the reported 15 percent to 20 percent level to "more normal" levels. 23/ Universal Cyclops Specialty Steel Division of Cyclops Corporation was forced to rescind its 5 percent to 7.5 percent price increase on stainless steels with the exclaimer: 21/ "The Steel Market," Bulletin of the National Association ÕI purchasing Management, Nov. 18, 1970, p. 3. 22/ "Steel Summary: Mini-Price War in Midst of Boom,. Iron Age, March 4, 1971, p. 79; .Price Shaving Continues for Many Basic Steel Products," Metalworking News, March 29, 1971, p. 17. 23/ "Joslyn Manufacturing and Supply Co. withdraw 5% to 6% Price Increase on Stainless Steel Bars, Wire and Billets,. Wall Street Journal, Feb. 5, 1971, p. 16. -182- Competitive action in the marketplace,
already evident, not only drastically minimized the effect of the increase, but would also serve to create further competitive chaos in an already chaotic market. ~/ From April througn July of 1971, demand surged in anticipation of a steel strike. Price discounts vanished and the industry put through a 6.25 percent pr ice increase in sheet and str ip products. ..~ . After the steel labor negotiations were settled without a strike, the industry announced, on August 2, 1971, an eight percent across-the-board pr ice increase to take effect on a staggered schedule from August 5 to December 1, 1971. However, demand was very weak and wi thin two weeks Bethlehem deferred its increase on cold rolled sheet until' February Ii 1972. 25/ Demand remained weak through November 1971, and secret pr ice concess ions were ava ilable. One steelmaker was quoted as saying that because of weak demand the: quoted pr ice s i tuat ion is very weak and almost mythical. It is so spotty it jumps allover the place and depends on whether you're competing against foreign mill deliveries or whatever. 26/ 24/ . Cyclops Division Resc inds Boosts in Steel Pr ices,. Wall street Journal, April 21, 1971, p. 3. 25/ .Slump in Orders May prompt Stee1makers to Follow Bethlehem's Price Rise Delay,. Wall Street Journal, Aug. 16, 1971, p. 4. 26/ .Steel Pr ices are soft, Some Concessions Available in Absence of Ordering sJrge,. Wall Street Journal, Nov. 8, 1971, p. 2. i -183- Apparently steel distributors were doing the bulk of the outright price discounting. The products most seriously affected were hot and cold rolled sheets since demand from the auto industry was low. Steel mills were also involved in discounting during this time, but the discounts of the major mills took the form of selling prime steel at secondary prices, and the dropping of some extra charges. 27/ The Steel Committee of the N.A.P.M:' stated in their December 1971 Bulletin: The committee splits evenly on the question of whether or not the latest price levels by major mills are holding firm. The softness seems to be in the form of concess ions on qual i ty or extras rather the direct concessions. About half of the committee members are finding that prices by the smaller mills have not followed the lead of the major producers. As would be expected, this condition is found most often in the South, where most of the smaller mills are located. In referring to prices of steel distributors the Steel
No comments