In recent weeks, the price of steel in the world has risen by 20% to 30%, making even less profitable American automakers worse. Many parts suppliers have been confused by the rise in steel prices. They have asked American auto makers to be more generous in terms of spare parts prices. At the same time, both manufacturers and suppliers have negotiated with the steel mills and demanded to reduce the cost of steel products.

Due to the tight supply of steel, many suppliers are faced with the harsh reality of either accepting higher prices or being shut down; on the other hand, automakers are desperately pushing down the prices of components in order to reduce costs. Therefore, suppliers The situation is very passive.

The rise in steel prices was beyond the surprise of car manufacturers. In the United States, Bush had earlier announced the reduction of foreign tariffs on low-cost imported steel. Therefore, manufacturers hope that this policy will lead to a reduction in the cost of steel. However, in fact, the price of steel products fluctuates and the price rises linearly. Analysts believe that the weak US dollar, the rapid development of developing countries such as China’s economy has led to the huge demand for iron ore, coke and steel is the direct cause of the global steel supply shortage. Due to the sluggish steel market in the United States in the past 10 years, many steel mills were forced to close their doors. Now, facing supply shortages, the remaining steel mills have raised steel prices to adjust the balance between supply and demand.

According to statistics from the London Metal Exchange Market, the price of cold coiled steel rose from US$375/ton in July last year to US$400/ton, and rose to US$440/ton in January this year. The prices of other steel products have risen even more. For example, the price of heavy steel plates increased from 340 US dollars/ton in December last year to 480 US dollars/ton in January of this year.

The rise in steel prices has had a major impact on the US auto industry. In recent years, domestic automakers in the United States are facing competition from Asian and European manufacturers, and the situation is very unfavorable. For example, the share of local cars in the United States’ three major auto manufacturers has fallen from 70% in 1980 to 45% in last year. In order to recover the lost market share, U.S. automobile manufacturers headed by GM launched a series of preferential promotion policies such as zero-rate loans and discounts, which led to further decline in sales profits of manufacturers. According to statistics, in January of this year, General Motors’ average promotional cost per vehicle increased from US$3,785 last year to US$4,189. In January, Chrysler’s promotional expenses increased from US$3,451 last year to US$ 3,904.

In addition, in order to recover the lost car share, the three major US car manufacturers changed the strategy of easing light-duty trucks and light cars in the past 10 years, and increased the development and production of new cars. Therefore, U.S. manufacturers will increase their demand for steel in the coming days. Under such circumstances, the rise in steel prices undoubtedly caused a head-on blow to the plans of US manufacturers to attack cars.

It is reported that in order to suppress the contradiction between supply and demand, the United States Steel Group, the largest steel producer in the United States, has announced that it will charge an extra 30 US dollars per ton of steel sold. A spokesperson for the U.S. Steel Group said that the company’s orders for the first quarter were already full and that orders for the second quarter were also near full. At the same time, due to the weakening of the U.S. dollar, the price of imported steel has increased, making the competitiveness of domestic steel mills greatly improved.

For an additional fee, major consumers of steel, such as General Motors, expressed great anger. GM strongly stated to its suppliers that the company will not pay extra for the cost of steel.

If rich financial companies have the power to refuse to pay extra fees, then for small companies, they may have to spend the money.

Now, the price of steel is constantly fluctuating. The price stability of steel will not exceed 24 hours. A Dutch company that produces trailers said that the company’s cost rose by 30% within a month. If the company cannot afford this burden, then only the increase in the price of the product would pass on the rise in costs.



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