11-03-04

Steel prices rocketeering?

Shell wonders what is wrong with steel prices:

(...) our vendors are no longer allowing us to use book pricing for steel products. We must get quotes from them for each order, and quotes will only be honored for 5 days.

[Note: I realise I don't often throw much of my personal information into the footlight (Yet! Working on it though ..), but you may have noticed this post in which I've said to have spent quite some time in steel construction business.]

Well, something smells fishy over here too; quoting myself in Shell's post:

[From Belgium] Consider yourselves lucky, I sent 5 demands out today to as many suppliers, of which one just plainly responded that he "couldn't see it fit to respond towards the order" (it wasn't a huge one, but it wasn't a small one either; almost all suppliers are suffering shortages in products), 3 others couldn't deliver half of what we had demanded.

When asked when the missing stuff could finally come in, a fifth guy said he "didn't even dare to say it", since "things are just drippling in, we just have to wait and see. I really can't give you anything on that."

Most of the offers lasted for about two days, one even had "prices valid for the next 24 hours only" on it, hardly usual and a sign of how suppliers view the current events.

People really are expecting much worse, estimates of a 30% rise are common for plain steel products, those for stainless steel go even higher, and --on a side-note but related-- prices for glass seem to be completely out of control.
There's a kind of panicky feel hanging over the whole situation, and news like this will probably make that worse:

SEOUL (AFP) - South Korea's third-largest steelmaker, Dongkuk Steel Mill, said it has suspended exports of all steel products to ease a worsening domestic supply shortage.

(...) Analysts and goverment officials expect a prolonged supply shortage because of China's high growth and a global economic recovery led by the United States, the world's largest exporter of scrap iron.

Separately, Finance and Economy Minister Lee Hun-Jai warned a further surge in raw material prices could delay the recovery of consumption and undermine growth.

Anyone care to comment on this graph? (Arcelor is one of the biggest steelsuppliers for the Belgian market)

The color of steel is often blue, but if things continue like they do, blue might well become the color of our faces when bills start to arrive ... or when product stocks are empty.


01:05 Gepost door Flint | Permalink | Commentaren (0) |  Facebook |

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