The president of the nation's largest steel company said yesterday that domestic steel makers will need price increases in the "near future regardless of what happens to imports."
Speaking to securities analysts in New York, U.S. Steel Corp.'s David M. Roderick said escalating costs make it imperative that steel producers charge higher prices, although he declined to be specific about the size of the increases he expects.
If steel makers raise their prices sharply, they could lose much of the assistance an administration plan to set minimum prices for imported steel could otherwise provide.
After some delay at the White House, the administration is expected to announce its five-part plan to help the hard-hit U. S. steel industry today. The centerpiece of that plan is a set of minimum prices that will trigger a quick, Treasury-initiated pricing investigation if foreign steel lands at U. S. ports below the minimum price.
The steel assistance plan was devised by an inter-agency task force headed by Treasury Under Secretary Anthony M. Solomon.
Administration officials said that their assistance plan entails no quid pro quo from industry that the steel makers hold down their prices.
However, one official noted, since the minimum price will be based on the cost of production of the most efficient foreign producer, if U. S. firms raise their prices much beyond those prices, the protection they will be afforded will slip.
Domestic steel buyers seem to be willing to buy from domestic producers when the diferential between U. S. steel and foreign steel is not too large. But when foreign steel costs $25 a ton less than U. S. steel, domestic buyers begin to shift their preferences, steel analysts say.
An administration official said the approach adopted by the government will not work to the satisfaction of U. S. steel companies unless their price increases are modest and not on a wide range of products.
Roderick said that any increase in prices next year will "have to at least recover" cost increased in labor and energy, especially coal, which is expected to rise sharply after the strike which starts today.
U. S. Steel has filed major anti-dunpring charges against Japanese steel makers. Roderick said yesterday it won't decide whether to withdraw the complaint's until it sees the reference prices devised by the government. Those prices are not expected to be available until mid-December or later.
In other developments yesterday.
U. S. Steel Corp. announced in Chicago that it would lay off an unspecified number of workers at its large plant on Chicago's southeast side, and at its bigger plant in nearby Gary, Ind.
A spokesman said the "soft" capital goods market was the reason for the layoffs at the South Works and that lower-than-normal orders contributed to the Gary layoffs. The company did not say whether the layoffs would be temporary or permanent. U. S. Steel officials said last summer they were considering permanently shutting the century-old South Works.
Armoco Steel Corp. said it has filed anti-dumping charges against the United Kingdom. The charges cover five carbon steel product lines that the company said represent 46 per cent of its output.