The Rising Influence of Rising Affluence

[DewDiligence]

(CLF)—US steel prices increase:

http://online.wsj.com/article/SB10001424127887323316804578161363173336772.html

Steelmakers, trying to reverse a prolonged decline in prices, have demanded spot-market price increases of up to 15% in the U.S. over the last seven weeks, according to letters sent to customers, but are only getting an average rise of around 10%, marking a modest recovery for a battered industry.

Spot prices for benchmark hot-rolled steel have basically stagnated over the last two years, but the recent increase suggests that customers are accepting somewhat higher prices due to a stronger market and to prevent the values of their own inventory from falling.

Prices in the U.S. are beginning to firm despite a global glut and soft prices elsewhere, due to the strong U.S. auto market, periodic shortages related to mill outages and high demand in local markets, such as shale regions in need of steel drilling pipe.

The spot price of hot-rolled steel is a component of CLF’s contractual prices of iron-ore pellets sold to US customers.