Steel prices - Yikes!

[swnoel]

Price gouging and deceptive advertising is the American way.

I was looking at prices on the Chinese mower I bought 2 years ago. The very day the steel tarrifs went into effect the price went up $300. As much as I like the store that sells them I can't see how they justify raising the price that high on existing stock.

Funny how this always seems to be the fact. Remember when gas prices would jump 20 -25 cents in a day... the thousands of gallons in the ground would automatically jump as well!

 

[D2Cat]

They have to replace their goods after they are sold to have some for the next customer. They anticipate that is what the increase will be on the next unit, so they'll have enough to replace inventory.

 

[fried1765]

They have to replace their goods after they are sold to have some for the next customer. They anticipate that is what the increase will be on the next unit, so they'll have enough to replace inventory.

Replacing inventory is why they they are entitled to windfall profits on their existing inventory ......inventory which was bought at a lower price?
Were I come from that is called "gouging".
Obviously they could justify a price increase on NEW inventory, if, and when, the new inventory cost increased.

 

[cdb2]

Folks. I own a consulting firm that my partner and I have had for the last 20 years. A tiny piece is to look at the domestic steel industry as a gauge of the economy as well as a marker for natural gas consumption. Anyway for the past 2-3 months the US mills are running at or near the top of the utilization rate for U.S. mills over the past decade. Overall capacity utilization is now near 80% of nameplate capacity vs 73-75% a year ago. The US mills are turning out about 150,000 tons more per week compared to a year ago. China produces about 50% of total world steel production; the US in recent years about 5%. This issue doesn't turn around overnight; it took many years to get so messed up, it will take quite some time to reverse itself in any meaningful way. But with US steel production up 5-8% from a year ago we are going in the right direction. Be patient; slow progress is happening.

Certainly the steel industry is going to be looking pretty good while a tariff is in place. But it is, of course, at the expense of the US steel consuming industries and consumers who have to pay inflated prices to cover the added production costs. We're the ones paying for the booming business you are seeing.

If the tariff is such a good thing, why have previous tariffs failed to fix the struggling steel industry? What is going to be different this time around?

In 1990 the U.S. produced 50+% more steel than the Chinese; in 2000 they passed us and were producing about 15-20% more than we do. By 2017 they were producing 10 times the steel that the U.S. does. With no unions; no real labor laws; little or no pollution laws, etc. what do you think would happen? The only way to compete once you get the rules fixed is to be smarter and more productive. But you have to get rid of the predatory pricing.

What the steel industry calls predatory pricing, the US manufacturers call a windfall. Why wouldn't you want the Chinese subsidizing US manufacturing by paying for our steel? It doesn't make a whole lot of sense to hobble every successful US industry (and consumers) in order to prop this single one up.

 

[cdb2]

we need to cut off those Countries that are using our money to prepare for war with us, though(2).

Like Canada?

 

[cdb2]

Obviously they could justify a price increase on NEW inventory, if, and when, the new inventory cost increased.

They don't have to justify their pricing at all. They'll price it as high as they think the market will bear, and you have a choice not to pay it if you don't want to.

Remember that the average margin on gas sales is under 3% and that includes the "gouging." It's not like they are laughing all the way to the bank. They could shut down the gas station and go invest their money in the stock market and likely make a better return.

Now if you want to talk gouging why don't you look at the government's take on that gallon of gas; it's a heck of a lot more than 3%.

 

[Snobdds]

Certainly the steel industry is going to be looking pretty good while a tariff is in place. But it is, of course, at the expense of the US steel consuming industries and consumers who have to pay inflated prices to cover the added production costs. We're the ones paying for the booming business you are seeing.

If the tariff is such a good thing, why have previous tariffs failed to fix the struggling steel industry? What is going to be different this time around?



What the steel industry calls predatory pricing, the US manufacturers call a windfall. Why wouldn't you want the Chinese subsidizing US manufacturing by paying for our steel? It doesn't make a whole lot of sense to hobble every successful US industry (and consumers) in order to prop this single one up.

Like Canada?

They don't have to justify their pricing at all. They'll price it as high as they think the market will bear, and you have a choice not to pay it if you don't want to.

Remember that the average margin on gas sales is under 3% and that includes the "gouging." It's not like they are laughing all the way to the bank. They could shut down the gas station and go invest their money in the stock market and likely make a better return.

Now if you want to talk gouging why don't you look at the government's take on that gallon of gas; it's a heck of a lot more than 3%.

With all due respect, I don't think you understand how this works.

 

[cdb2]

With all due respect, I don't think you understand how this works.

Please educate me, I'd like to learn. In particular, any evidence that contradicts my conclusions would be most welcome.

 

[davedj1]

Unions and the EPA are what caused the steel industry in this country to fail. In foreign countries with no regs and low wages they can under sell even with shipping factored in. Just my .02

I talked to my local fabricator today and he said that steel prices have leveled off. He didn't seem to concerned about it. I know when building material takes a jump we just have to pass it on to our customers as well.

 

[airbiscuit]

Unions and the EPA are what caused the steel industry in this country to fail. In foreign countries with no regs and low wages they can under sell even with shipping factored in. Just my .02

I talked to my local fabricator today and he said that steel prices have leveled off. He didn't seem to concerned about it. I know when building material takes a jump we just have to pass it on to our customers as well.

You forgot corporate greed and lack of investment in technology. They all had a hand.