Steel prices see strong increases in America raise auto prices by at least 500 dollars

Posted on Wednesday, 4 June 2008 , 15:06:56 byEmil

Filed under steelpriceu.s.americaNone

Steel prices see strong increases in America raise auto prices by at least 500 dollars

Just as the oil price skyrocketed due to raised global demand, the cost of steel is greatly increasing on the back of the rising demand. That means bad news for the carmakers — and ultimately the auto buying public — as the cars contain now between 2,400 and 3,000 pounds steel.

In addition, rising raw material prices are pushing up also the cost of a few other key ingredients for the car industry — including platinum (that's used in catalytic converters) plus aluminum.

"The automakers are between a rock and a hard place," Pete Peterson, steel industry consultant, former director of automotive marketing with the U.S. Steel Corp., told Automotive News.

Although a few carmakers like General Motors say they will refuse paying the surcharges, they might not have that much say in the matter. "We will not be in a position to assure continuity of supply," says one industry insider. "Why should I sell to GM at a lower price when I can sell steel to the energy market and other strong markets?"