Rising steel prices!! Are tractor prices next?

[boustany]

Gents

The price of steel is only part of the problem. The greenback has been weak and is likely to get a lot weaker. Combine massive government deficits with a huge trade imbalance and you can bet on a devalued currency. The good news for US manufacturers is that it'll make US goods cheaper for export, and make imported goods (like from China) more expensive.

That means pretty much everything imported into the US is get get more expensive: not just steel but diesel engines, tires, you name it. /forums/images/graemlins/tongue.gif

The loonie, on the other hand has been going up, so we're starting to spend like druken sailors because imports are getting cheaper for us! /forums/images/graemlins/smile.gif

 

[HayDR]

The problem with your premise is the Chinese currency is currently keyed to US $ and moves as the US$. There has been some talk about a 10% adjustment but that has not taken place. Also we now live in a world Economy and for the last 30 years the low-tech products and components have migrated away from the USA in to foreign countries. Many of the auto components are not made here in the USA by anyone and it's like this in other industries. We have to pay more for the components and have to raise the prices to offset this and it's a "0" sum game . Realize besides high-tech items we lead the world only in Agriculture production. Europe blocks our beef and has done so for 10+ years. Europe also blocks much of our grain products and has done so for 6+ years. We need to play hardball and open these markets back up. We can sell grain to many countries but they can not pay for it so many of the richer countries have protectionist views on Agriculture. The same with France and Airbus, France subsidizes it. We ought to do the same with Boeing or we are going to lose this industry.

 

[boustany]

The comment was not the US $/Chinese, it was about the US $ relative to (almost) all major currencies. The US currency has had a free ride despite a growing trade deficit, which usually damps out foreign exchange spreads, but increased use of the US $ as a world currency provided offset demand. As the US $ drops in value, and as the Euro gains legitimacy, expect greater acceptance of the Euro as world currency.

Governments can protect the value of the currency by raising interest rates. If this were to happen in the US, the real estate bubble would burst and it would have a calamitous impact on consumer spending and businesses alike.

Besides, the most likely way to reduce the trade deficit is to reduce export prices and increase import prices which is what devaluing a currency accomplishes.

As for agriculture and aerospace, any country which can afford to subsidize these does, and/or erects trade barriers to 'protect' their domestic sector. More protectionism simply prolongs the economic disruption which results. Sadly, it is a great way to get votes, though. /forums/images/graemlins/frown.gif

 

[fivestring]

<font color="red">"Besides, the most likely way to reduce the trade deficit is to reduce export prices and increase import prices which is what devaluing a currency accomplishes." </font>

It's called "Fair Trade".
America's fair trade started taking a nose dive with the oil embargo of the 70's.
Jesse Helms knew this. That's why foreign relations was a thorn in his side. He saw the farce of sending billions and billions to other countries when most of it should have stayed here. He knew there was no more "fair trade" for America.

Then came the strengthening of the UN and things like NAFTA.... Been downhill ever since.

 

[frank_f15]

u are right there is no such thing as fair trade, we are just getting hosed by everyone, till they need the good old USA to bail them out.

let me see, /forums/images/graemlins/smirk.gif, steel price are skyrocketing, oil Prices ar very high, gasoline prices are at all time highs, nat, gas is very high, BUT INFLATION IS IN CHECK?

 

[DKinWA]

I just heard today that steel is going for $0.60 a pound. I've been shopping around for a new welder and now I'm starting to think the cost of the welder will be the least of my concerns /forums/images/graemlins/blush.gif

 

[MessickFarmEqu]

Just got a notice from Woods, new steel surcharges on orders.

 

[rdam]

I'm pricing out Ford trucks. The prices /forums/images/graemlins/confused.gif went up about $200 in the last 5 days...Could it be steel?

 

[frank_f15]

</font><font color="blue" class="small">( Just got a notice from Woods, new steel surcharges on orders.
)</font>
i guess i can understand that, but i wonder /forums/images/graemlins/confused.gif when the price of steel goes down, will the prices on products go down?

 

[5030]

Steve:

You are not quite right. You need to read the thread on steel prices. They are buying or I should say bought American scrap in tremendous quantities.

The ore produced is down due to the largest Taconite producing mine being shut due to a fire. The mine had to be flooded to extinguish the fire. The particular mine produces 35% of the domestic Taconite.

I addressed the steel cost in that thread. It's a lengthy explanation. I work directly in the steel industry and have a good handle on what's actually happening.