By May 1973, the boom spread to the remainder of the steel market with heavy steels such as heavy plates, ,'."'" :.:;- ~&...
By May 1973, the boom spread to the remainder of the steel market with heavy steels such as heavy plates, ,'."'" :.:;- ~' '0 ,,~ structural shapes, oil country goods and pipe in short supply. 38/ The domestic boom coincided with a worldwide boom, so that foreign steel was generally available only at higher pr ices. The across-the-board boom continued throughout 1973. In the face of Cost of Living Council price controls, a significant shor tage of steel developed. Many produc ts, such as rebar, were being sold by steel brokers at pr ices well above the 36/
"Steel Summary," Iron Age, April 26, 1973, p. 101¡ "Sheet Steel Pr ice Boost Seen, Soon to Ease What Industry Contends is a Profit Squeeze," Wall Street Journal, May 7, 1973, p. 36. 37/ "The Steel Market," Bulletin of the National Association or Purchasing Management, May 1973, p. 3. 38/ "Steel Summary," ¡IrOn Age, June 7, 1973, p. 81. -188- mill price. ~I Discounts off list virtually vanished and charges for "extras" were revised upward. Commenting on these developments the Steel Market Committee in August 1973 stated: The industry is trying to improve its net by the elimination of "deals," revisions in extras, elimination of unprofitable products and customers. . . . IT) he once lowly rebar is so scarce that a form of black ma rket seems to be develop ing as some brokers ask double the going iilLprice. . Foreign steel is still being delivered here but generally under long term contracts and only to very important customers. Pr ices generally seem to be above domestic for the material available. lQI . The Steel Market Committee's November 1973 report stated:, The premiums now being paid for imports by the same people who were the low dollar buyers in the past should demonstrate that opportunism has two edges. . . . Apparently users are paying up to a third more for foreign because its all they can get and are being very quiet about it. .
. . It is interesting that only one Committee member lists price as a major consideration. All others consider availability as their first concern. All say that price increases will cause no change at all in buying pol icy. ill In the first quarter of 1974, automotive demand dipped. Nonetheless, the full-blown boom continued. The demand for heavy steels was as strong as ever, and the demand for flat 391 "Mersick and Co. Chairman Asks: 'Where Is the Steel Going?'" American Metal Market, Oct. 19, 1973, p. 1. 401 "The Steel Market" Bulletin of the National Association of PUrchasing Management,i Aug. 1973, p. 7. I i ill Ibid. Nov. 1973,: p. 7. -189- rolled products from other industries was sufficient to consume mill production. Moreover, there were reports that the automobile industry was taking its allocation of s'heet and reselling it at a premium. ~/ Automotive demand returned in the- second quarter of 1974 and demand remained at a peak until October ~ 1974. !y Many mills, including U. S. Steel, dropped their policy .#'¡; . of freight absorption and the schedule for extras was revised upward so that it corresponded more closely with costs. !l/ Due to the strength :of demand, steel mills were able to sell products of lower quality. This was a major factor in increasing the industry's yield of shipped to raw steel from 68.9 percent in 1972 to 75.2 percent in 1974 (see table 4.8). 45/ In their May 1974 Bulletin, the Steel Market Committee
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