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Steel Users Prepare for Higher Prices After Bush Tariff- "We Feel Let Down"
Grand Rapids Press ^ | 3/8/02

Posted on 03/08/2002 6:02:50 AM PST by 11th Earl of Mar

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Steel users brace themselves for higher prices

Thursday, March 07, 2002By Barbara Wieland
The Grand Rapids Press


Steelcase Inc. chose its name for a reason.

The country's largest furniture manufacturer goes through more than 200,000 tons of steel a year, said Brian Van Dommelen, leader of corporate steel services for the Grand Rapids-based company.

Steel is the single largest commodity the company buys.

So it is no wonder that Steelcase has turned a wary eye toward the tariffs President George Bush recently slapped on imported steel.

The tariffs, ranging from 8 percent to 30 percent, could have a major impact on Steelcase's business. But how much of an impact remains to be seen, Van Dommelen said.

Other steel users in the area also wonder how the tariff decision will affect business. Some have already seen steel prices increase.

Others worry that foreign steel producers will shy away from the American market, causing a steel shortage.

Part of the steel users' uncertainty rests on the complexity of the tariff decision. Some steel products will be exempt from the tariffs while others will see large price increases.

And it is too soon to know how steel manufacturers, both domestically and abroad, will respond to the tariffs.

Steel users may be unsure about future steel prices, but steel producers are not. Steel users such as Haworth Inc. and GR Spring &Stamping already see higher prices.

The tariff could increase steel prices 20 percent at Holland-based office-furniture maker Haworth, spokeswoman Beth Parenteau said. She said 20 percent of Haworth's yearly purchases are for steel, not including components bought from suppliers that include steel.

Steel prices have gone up at GR Spring &Stamping, too, President Jim Zawacki said. "Even before Bush made the decision, our suppliers started ripping up the contracts," he said. "They said they can't honor them anymore, that prices would go up."

Normally, GR Spring &Stamping signs one-year contracts that lock in steel prices. The company, which stamps out metal parts and makes springs, uses 20 million pounds of steel a year.

"We felt we've been let down," he said. "We didn't expect anything over 10 percent. This will raise our costs substantially."

That cost might be high enough to prompt some manufacturers to leave the country, said Andrew Samrick, executive vice president of Mill Steel Co. His Grand Rapids company buys steel in bulk and cuts it down to size for office furniture, automotive and appliance manufacturers.

Higher costs of production have induced some businesses to leave West Michigan before. That happened when LifeSavers decided to leave Holland for cheaper sugar prices in Canada, he said. Now, both Canada and Mexico might have cheaper steel than the United States.

"With higher steel pricing, we'd expect those places to become far more enticing," he said.

Samrick hasn't heard any local companies talk about leaving, but the topic has come up in industry trade association talks.

"What could be done to prevent that happening? I honestly don't know," he said.

Another steel distributor, Anderson Metal Service in Grand Rapids, thinks the tariff decision could further hurt the ailing tool and die industry. Anderson Metal sells steel to local tool and die shops, which make the dies manufacturers use to stamp out metal parts.

Even before the tariff decision, many manufacturers were lured by cheaper prices offered by overseas tool and die shops. Now that the steel used by American tool shops will be higher, more manufacturers could opt to send their business abroad.

Dan Anderson, president of Anderson Metal, also thinks the tariffs could lead to steel shortages.

"There could be fewer foreign steel makers willing to sell to the U.S.," he said. "There's been talk about the possibility of steel allocations, where (steel) mills dictate how much steel is available to any company."

Those shortages could push steel prices up even further, he said.

It's still too soon to know if any of those scenarios will become reality, Anderson said. But it's something he and other steel users will watch in the weeks to come.

"We'll have to wait to see how far-reaching it will be," he said.

Press Reporter Rob Kirkbride contributed to this report.



© 2002 Grand Rapids Press. Used with permission
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TOPICS: News/Current Events
KEYWORDS: michaeldobbs; willielogic
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To: Toddsterpatriot
You lost me again.

You were lost 20 replies ago.
I figure you're hopeless.

61 posted on 03/09/2002 5:36:12 PM PST by Willie Green
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To: Toddsterpatriot
You sound like Rocky the Squirrell "This time for sure"

I'm crushed! A rapier wit and a world renowned free market economist. I'm in the company of greatness.

So the sky isn't won't fall if Bush tweaks the EU for a couple of years? Life will go on if the socialists have to rid themselves of some excess capacity? There won't be a depression and a world war? A president actually kept his word from when he campaigned?

I'll be damned.

62 posted on 03/09/2002 6:57:31 PM PST by jwalsh07
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To: GuillermoX
Should be ban recycling

Not at all. Pig iron is $200 per ton last I looked, which was 20 years ago. It's a controlled price. Manufactured steel has variable prices depending on alloy and shape; it's not a controlled price. The steel industry is not mainly producing virgin pig iron, but steel shapes and alloys. Much of the steel has been through the mill before, has come back after the manufactured item has worn out, and is thrown into the furnace along with new iron. Steel girders in Arafat's office building are right now headed for the recycling furnace, for example.

The real room for growth of the steel industry is in the developing world. Right now steel usage worldwide is about 20% of what it could be if all countries were running at Western levels of usage.

63 posted on 03/09/2002 7:02:02 PM PST by RightWhale
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To: Willie Green
Yeah, logic is confusing to you.

Prices skyrocket, commerce nosedives. Ripples throughout our economy, nobody's immune

I can always point to this and tell people you almost had a correct thought.

64 posted on 03/09/2002 7:42:15 PM PST by Toddsterpatriot
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Comment #65 Removed by Moderator

To: jamesbond
There are no cars made in the USA?? Heck, BMW's, Mercedes, all Japanese car co's have mfg facilities in the USA.
66 posted on 03/09/2002 7:57:26 PM PST by GuillermoX
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To: jamesbond
Factory orders rise for second month in January

3/7/2002
Los Angeles Times


U.S. manufacturing orders rose in January for a second straight month, another sign the economy is starting to recover from recession.

Orders increased 1.6% to $ 325.8billion, reflecting more demand for autos and computers, after rising 0.7% in December, the Commerce Department said. The last time factory orders rose in consecutive months was February and March 2001, just as the economy was slipping into recession.

67 posted on 03/09/2002 8:02:52 PM PST by GuillermoX
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To: jamesbond
Can you name another product besides steel and rubbermaid?

Shows how little you know. Find below a list of products manufactured in the USA, with links to the companies that manufactur them. (This is just one of about 15 manufacturing categories)

Automation, Production and Testing Equipment HOME | NEW SEARCH

Product Groups

Automation, Production and Testing Equipment
Chemicals (browse alphabetically for 15,000 chemicals)
Computers and Software
Electrical Equipment & Systems
Electronics
Energy Management
Environmental Protection, Pollution Control
Fastening, Joining and Assembly
Fluid and Mechanical Power Transmission
Logistics and Transportation
Machine Tools, Machining Equipment and Supplies
Maintenance Tools and Supplies
Manufacturing Materials, Metals and Plastics
Material Handling Equipment
Packaging Equipment Systems and Supplies
Plant Systems, Services and Equipment
Professional Services, Office Equipment and Supplies
Safety, Health and Security
Accelerometers
Accumulators
Actuators
Afterburners
Aftercoolers : Compressed Air
Agglomerators
Alarms : Spill
Alternators
Analyzers
Analyzers : Air
Analyzers : Materials : Hazardous
Analyzers : Process
Analyzers : Toxicity : Water
Analyzers : Water Quality
Anemometers
Annunciators
Antistatic Materials Or Equipment
Arrestors
Artificial Intelligence - AI
Assemblies
Autoclaves
Automation
Avionics
Axles
Bacteria
Baffles : Floating
Bags : Air
Bags : Filter
Bags : Sampling : Gas
Balances : Analytical
Balls
Bars : Draw
Baths : Temperature
Bellows
Belts
Belts : Filter
Bladders : Vapor
Blenders
Blowers
Booths
Booths : Spray : Paint
Breakers
Brushes
Buckets
Buffers
Bumpers
Burners
Bushings
Cable
Calciners
Calibrators
Calipers
Cams
Carriers : Cable
Carriers : Hose
Carts
Casters
Castings
Cells : Load
Centrifuges
Ceramics
Chambers : Environmental
Chemicals : Carbon : Activated
Chromatographs
Closers : Pouch : Film
Cloth : Filter
Cocks : Gauge
Coils
Coils : Voice
Collars : Shaft
Collectors
Combustion
Comminutors ***** See Also Crushers, Mills, Mixers, Pulverizers
Comparators : Optical
Components : Conveyor
Components : Guide : Bearing : Ball
Components : Pneumatic
Condensers
Consoles
Control
Control : Static
Controllers
Controllers : Density
Controllers : Process
Controls
Controls : Remote : Radio
Controls : Speed
Conveyors
Cores : Ferrite
Counters
Counters : Particle
Covers : Floating
Crystallizers
Cut-Offs : Thermal
Cyclones
Dampers : Vibration
Decomposers : Ozone
Degasifiers
Degritters
Desorbers : Thermal
Detectors
Detectors : Bag Rupture
Detectors : Combustion
Detectors : Dust
Detectors : Fault : Electrical
Detectors : Flame
Detectors : Fluorescence
Detectors : Gas : Combustible
Detectors : Gas : Toxic
Detectors : Heat
Detectors : High Performance Liquid Chromotography - HPLC
Detectors : Leak : Hydrocarbon
Detectors : Mercury
Detectors : Metal
Detectors : Particulate
Detectors : Spark
Detectors : Vibration
Detectors : Water
Devices : Control : Processing : Industrial Flow
Devices : Cooling
Devices : Measuring : Temperature
Devices : Metering : Process : Industrial Flow
Devices : Pressure
Devices : Sensing : Remote
Devices : Timing
Dischargers : Bin : Bulk Material
Discs
Discs : Rupture
Dispensers : Liquid : Drum
Dispensers : Tablet : Chemical
Displacement And Position Measurement
Displays
Diverters : Conveyor
Dowels
Drives : Optical
Eductors
Ejectors
Eliminators : Electricity : Static
Engines
Equipment : Aeration
Equipment : Alignment
Equipment : Analysis : Pollution : Air
Equipment : Baghouse
Equipment : Balancing
Equipment : Bending
Equipment : Bioassay
Equipment : Cooling
Equipment : Cutting : Glass
Equipment : Display : Data
Equipment : Fabrication : Tube
Equipment : Foam
Equipment : Forming
Equipment : Granulating
Equipment : Handling : Ash
Equipment : Handling : Chip
Equipment : Handling : Coil
Equipment : Handling : Glass
Equipment : Heating : Induction
Equipment : Infrared
Equipment : Laboratory
Equipment : Loading : Presses
Equipment : Measurement : Flatness : Floor
Equipment : Process : Electrochemical
Equipment : Protection : Cathodic
Equipment : Sampling
Equipment : Sanding
Equipment : Screening
Equipment : Separation : Centrifugal
Equipment : Spray
Equipment : Sterilizing
Equipment : Test : Automatic
Equipment : Test : Fiber Optic
Equipment : Test : Flammability
Equipment : Thermoforming
Equipment : Treating : Heat
Equipment : Treatment : Thermal
Equipment : Ultrasonic
Equipment : Water Jet
Equipment : Weighing
Equipment : Winding : Coil
Extractors : Liquid
Feeders
Feeders : Bin : Bulk Material
Feeders : Polymer
Filters : Gravity
Filters : Mechanical
Filters : Physical
Flasks : Dewar
Fluidics
Fluids
Flumes
Followers : Cam
Forms : Wire
Furnaces
Furnaces : Laboratory
Gages - Gauges
Gages - Gauges : Strain
Generators : Hypochlorite
Glass
Glasses : Sight
Glassware : Laboratory
Grabs
Grippers
Guides : Textile
Guides : Thread
Gyroscopes
Headliner
Heatsinks
Holders : Filter
Hoppers
Humidity Instrumentation
Hygrometers
Idlers : Conveyor
Incinerators : Fume
Indexers
Indicators
Indicators : Density
Indicators : Tension : Cable
Inductors
Instruments
Instruments : Gas
Instruments : Gas : Flue
Instruments : Geophysical
Instruments : Isolation
Instruments : Meteorological
Instruments : Moisture
Instruments : Power
Instruments : Viscosity
Integrators : Chromatographic
Isolators : Opto
Kilns
Kits : Test
Knives : Air
Laboratories : Mobile
Labware
Lasers
Lenses : Optical
Level Instrumentation
Levelers
Lifts : Magnetic
Linings
Linkages : Controls
Locators
Loggers : Data
Machines : Assembly
Machines : Measuring : Coordinate
Magnetometers
Magnets
Magnets : Wire
Manometers
Markers : Wire
Materials : Magnetic
Materials : Optical
Materials : Perforated
Mechanisms : Servo
Media : Filter
Membranes
Meters
Meters : Conductivity
Meters : Dosimeters
Meters : Dynamometers
Meters : Nephelometers
Meters : Pyrometers
Meters : Turbidity
Microfilm
Micrometers
Microscopes
Mills
Mixers
Mixers : Polymer
Monitors : Calibration : Air
Monitors : Effluent
Monitors : Formaldehyde
Monitors : Spill
Motion Control
Mufflers
Mufflers : Exhaust
Networks : Sensor-Level
Operators : Valve
Orifices
Oscillators
Ovens : Laboratory
Oxygenators
Pads : Mounting
Paper : Test
Parts : Formed : Cold
Parts : Washer
pH Instrumentation
Phase Instrumentation
Pivot
Plotters
Positioners
Positioners
Positioners : Valve
Potentiometers (See AlsoTrimmers)
Precipitators : Electrostatic
Preheaters
Presses
Presses : Belt : Mobile
Presses : Filter
Probes
Pulleys
Pulverizers
Rails : Magnetic
Rappers : Precipitator
Readouts
Readouts : Digital
Recorders
Reducers : Speed
Refractometers
Regulators
Regulators : Gas
Reservoirs
Retarders : Conveyor : Gravity
Retarders : Load
Rheostats
Rings : O-Rings
Rings : Slip
Robotics
Rolls
Ropes : Wire
Samplers : Ash : Emissions : Stack
Scales
Scarifiers
Scopes : Oscilloscope
Screens : Vibrating
Sensors
Sensors : Density
Sensors : Force
Separators
Services : Aligning : Machine
Services : Analysis
Services : Analysis : Polychlorinated Biphenyls - PCB
Services : Analysis : Thermal
Services : Analysis : Vibration
Services : Calibration : Instrument : Nuclear
Services : Chromatography : Gas
Services : Detection : Leak
Services : Digitizing : Strip Chart
Services : Distillation
Services : Extraction : Vacuum
Services : Forming
Services : Laboratory : Test
Services : Measurement : Odor
Services : Measurement : Resistivity : Particulate
Services : Measurement : Size : Particle
Services : Microbiology
Services : Monitoring : Flow
Services : Monitoring : Runoff : Water : Storm
Services : Mounting : Machine
Services : Plating
Services : Preparation : Sample : Automated
Services : Processing : Foundry
Services : Processing : Rubber
Services : Repair : Instrument
Services : Repair : Monitor : Continuous Emissions
Services : Retrofitting : Baghouse
Services : Spectrometry : Mass
Services : Test - Testing
Services : Test - Testing : Leak
Services : Test - Testing : Monitor : Continuous Emissions
Services : Test - Testing : Non-Destructive - NDT
Services : Test - Testing : Smoke
Services : Welding
Sets : Engine
Sets : Generator
Shakers
Sheaves
Shielding
Sieves
Signal Conditioning
Silencers
Sleeves
Sleeving
Slides
Snubbers : Pressure
Specific Gravity Instrumentation
Spectrometers
Spectrophotometers
Stages
Stands : Test
Subsystems : Clean Room
Switches
Switches : Limit : Programmable
Synchronizers
System : Guarding : Machinery
Systems : Abatement : Fume
Systems : Automation : Laboratory
Systems : Calibration
Systems : Clean Room
Systems : Coating
Systems : Conditioning : Evaporative
Systems : Control : Batch
Systems : Control : Numerical
Systems : Control : Process
Systems : Control : Supervisory
Systems : Coolant
Systems : Cryogenic
Systems : Feedwater
Systems : Filling : Drum
Systems : Flotation
Systems : Handling : Condensate
Systems : Handling : Metal Chip
Systems : Metering : Polymer
Systems : Monitoring
Systems : Monitoring : Manhole Vacuum Tester
Systems : Monorail
Systems : Mounting : Motor
Systems : Positioning
Systems : Recovery : Acid
Systems : Return : Condensate
Systems : Statistical Process Control - SPC
Systems : Telemetering
Systems : Test -Testing : Automatic
Systems : Test -Testing : Emission
Systems : Treatment : Electrochemical
Systems : Vision
Systems : Warehousing : Automated
Tables : Transfer
Tachometers
Tanks : Surge
Teleprinters
Test And Measurement
Test Equipment
Testers
Thermometers
Thermoregulators
Thermostats
Timers
Totalizers : Flow
Transducers
Transmitters : Density
Transmitters : Position : Valve
Trimmers
Trimmers (See Also Potentiometers)
Turbulators
Turrets
Ultrasonics
Vibrators : Bin
Washers : Parts
Webs : Guiding
Wheels : Handwheels

68 posted on 03/09/2002 8:19:23 PM PST by GuillermoX
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To: 11th Earl of Mar
bttt
69 posted on 03/09/2002 8:37:28 PM PST by Gladwin
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To: Willie Green
Thanks. I will read that tomorrow.
70 posted on 03/09/2002 8:56:13 PM PST by VA Advogado
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To: Toddsterpatriot
You sound like Rocky the Squirrell "This time for sure"

LOL I just wanted to read this again.

71 posted on 03/09/2002 8:57:57 PM PST by VA Advogado
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To: VA Advogado
If only we get protection for a little while, everything will be ok.
72 posted on 03/09/2002 9:34:54 PM PST by Toddsterpatriot
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To: Toddsterpatriot
If only we get protection for a little while, everything will be ok.

Eventually they turn off their malaysian made computers, turn on their japanese made TVs and watch a good canadian hockey game. Of course they do it with the blinds drawn and the lights down in the living room.

73 posted on 03/09/2002 9:40:03 PM PST by VA Advogado
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To: Toddsterpatriot
Here's a little tidbit from a '99 CATO paper on the subject. Bet it won't slow down the protectionists at all, but thought you might enjoy it.

The steel industry itself has been a major importer of semifinished steel products. In 1998 more than 6 million tons of steel slabs, billets, and blooms were imported for use almost exclusively by steel mills.

When combined with wire rod and other semifinished products, imports by the steel industry reach 20 to 25 percent of overall steel imports. In November 1998 the International Trade Commission heard testimony that several of the major steel mills that have petitioned against steel imports were themselves placing orders to import large amounts of the very same products as recently as August 1998.

In the view of the big U.S. steel mills, apparently, these are “good” steel imports, while steel products that compete directly with what they produce are “bad” imports.

If you're interested, later I may pass along what the Commerce Dept. says about another phony argument from the protectionists - defense needs.

74 posted on 03/09/2002 9:42:30 PM PST by FirstFlaBn
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To: FirstFlaBn
Yes and, surprise surprise, no tariff on steel slab.
75 posted on 03/09/2002 9:55:43 PM PST by edsheppa
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To: FirstFlaBn
Sure. Oh make sure to flag Willie Green. Did you see him admit earlier that higher prices are bad for the economy? I almost spit my coke onto the screen.

He didn't catch the drift that high prices are bad whether they do it to us, or we do it to us.

Maybe I'll get him to admit it next time.

76 posted on 03/09/2002 10:01:16 PM PST by Toddsterpatriot
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To: jwalsh07
I'm crushed! A rapier wit and a world renowned free market economist. I'm in the company of greatness.

Shucks, thanks for noticing.

So the sky isn't won't fall if Bush tweaks the EU for a couple of years?

Yeah and the steel industry won't be saved either. The Rocky the Squirrel reference is because we tried this tariff thing before and the steel industry still loses tons of money. Why will it be different this time?

77 posted on 03/09/2002 10:06:02 PM PST by Toddsterpatriot
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To: jwalsh07
An ounce of prevention is worth a pound of cure and anybody who claims this is calamitous should be able to flash back to the 80's and show you and I the global depression emanating from targeted tariffs.

If these targeted tariffs are such a good thing tell me why those countries with the highest tariffs have such poor economies?

Argentina sound familiar? They sure are doing a good job of protcting their industrial base.

78 posted on 03/09/2002 10:17:59 PM PST by Toddsterpatriot
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To: 11th Earl of Mar; doug fiedor; one_particular_harbour; dead
This pandering of Bush sounds perfectly logical to me.

Kinda of like when you find a man that is drowning, be sure to offer him a drink of water.

79 posted on 03/09/2002 10:24:53 PM PST by the irate magistrate
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To: edsheppa
What about the 'job losses' from these imports? Isn't that one of the big issues constantly whined about by both the unions and the steel companies? By using their method, these imports 'cost' about 24,000 full-time jobs making this raw steel.

From what you're saying, when intermediate users of steel produce auto parts, machinery, or washing machines from it, they have to pay a tariff, but when another intermediate user - steel companies - use imported raw steel to make pipe or structural shapes, they don't have to pay a tariff?

Did you say you had an economic point to make? You certainly failed the first time. Try rereading the last line of the CATO article - some steel imports are good and some are bad. Explain that in economic terms.

80 posted on 03/10/2002 8:31:39 AM PST by FirstFlaBn
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