Steel and aluminum prices are at their highest levels in years, presenting a challenge for U.S. companies already struggling to make enough products, The Wall Street Journal said.
Executives told The Wall Street Journal that their companies have hired more people to seek out available supplies, and the businesses have been forced take what steel they can get.
Rising costs have forced Campbell Soup Co. to pay more to get the cans for its soups, Peloton Interactive to pay more for stationary bike parts, and Steelcase to pay more to make metal desks and filing cabinets, The Wall Street Journal said Wednesday.
Car makers such as Ford Motor Co. and General Motors also are coping with higher prices.
“It’s crazy for steel,” Brian Nelson, president of HCC Inc., which sells large metal accessories to tractor manufacturers, told The Wall Street Journal. “I can’t even get material at times.”
A ton of steel that cost $560 in September for both 2019 and 2020 was estimated to cost $1,940 at the start of this month, based on a Midwest steel index calculated by CRU Group.
The price of steel and iron nearly doubled in August from the year before, according to a U.S. government index tracking. That was the biggest relative increase since records began in the 1920s.
Consumers already are feeling the effects, especially for products such as cars and appliances. Labor Department data showed household appliance prices rose by 6.8% in August, the highest year-over-year increase in a decade.
The $5.9 trillion U.S. manufacturing sector has been struggling with a shortage in semiconductor chips, logistics problems, and scarce labor, The Wall Street Journal said.
Steel prices are rising because of high demand for manufactured goods, according to trade groups representing manufacturers.
Tariffs on imported steel that were implemented by the Trump administration, and continue under the Biden administration, also are contributing to the higher steel prices, Kip Eideberg, the head of government relations for the Association of Equipment Manufacturers, told The Wall Street Journal.
“They could remove the tariffs tomorrow if they wanted to,” Eideberg said.
Manufacturers are accepting nonstandard metal sizes, bulking up their supply-chain teams, increasing prices and turning to imports to keep production going, The Wall Street Journal reported.
“We are having to be flexible to a level we have never been before,” Richard Dix, the head of supply chain for corn-planter maker Kinze Manufacturing Inc., told The Wall Street Journal. “If I prefer my steel in 10-foot chunks, I may have to buy it in 12-foot chunks and cut off two for scrap.”
Steel buyers said U.S. producers could boost production by restarting idled plants.
Projections by analysts say China, which makes more than half the world’s steel, will decrease its production as that country tries to cut carbon emissions.
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