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January 21, 2004
Steel Price Explosion!
Updated
On February 1, 2004,
our steel vendors are doubling their pricing on all steel deliveries on
orders placed months ago at lower rates. The severe shortage of raw
materials, worldwide demand and currency fluctuations are being cited for
the immediate and non-negotiable action. Effective February 15, 2004 all
new steel drum prices will increase by 9.5% as a result of this unforeseen
increase. Additional increases may be necessary in response to the volatile
actions of the steel industry.
January 16,
2004
Emeryville,
California – Recent developments in the steel industry are having a dramatic
effect on steel supply and pricing for early 2004. US steel mills are
threatening allocation and price hikes even on existing orders. The
following have contributed to this abrupt turn of events:
China Steel
Demand --
Steel pricing on the West Coast is now driven by the unprecedented demand
for steel in China. Domestic steel mills and their foreign competitors can
sell steel into China at higher prices than in the United States.
Weak US Dollar
-- Exporting domestic steel has become lucrative due to the favorable buying
power of foreign consumers while at the same time the reduced buying power
has stifled steel imports.
Steel Industry
Consolidation --
President Bush justified the recent expiration of the Section 201 steel
tariffs because sufficient industry consolation he had requested had been
met. Today, three US steel producers are supplying over sixty percent of
the market.
Raw Material Shortage
--
Short supplies of iron ore,
coke and steel scrap have sent steel prices through the roof.
Myers Container is
managing its purchasing strategies as aggressively as possible with our
number one priority to anticipate and cover our customers’ needs. We
anticipate that steel drum prices will rise very soon.
Questions? Contact
your Account Manager our Customer Service Center at 800.406.9377.
Kyle R. Stavig
Vice President, Sales & Marketing
Kstavig@myerscontainer.com
www.myerscontainer.com
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