Bethlehem Steel Corp., taking advantage of tighter supplies and the rising price of imported steel, yesterday announced a $30-a-ton price increase on most of its sheet metal products, beginning April 1.
Bethlehem's move is an attempt "to restore sheet metal prices to more equitable levels," said company spokesman Henry H. Von Spreckelsen. USX Corp., formerly United States Steel Corp., announced a similar price increase last week.
The steel companies are "trying to recapture what they've been giving back over the last several years," said Aldo J. Mazzaferro Jr., an analyst with Cyrus J. Lawrence Inc. in New York.
The action will increase the "transaction price," the actual amount paid by steel buyers. That price may vary from the base price, depending on market conditions.
Even with the increases, Bethlehem's and USX's prices will barely be what they were four years ago, Mazzaferro said. "I don't see this as inflationary," he said.
For most of this decade, domestic steel prices have been depressed, largely held down by less-expensive foreign steel moving into the U.S. market.
But now the anemic dollar and a tighter supply of sheet metal are helping the steel companies impose higher prices, according to Mazzaferro and several steel industry officials. Unfavorable exchange rates have raised the cost of imported steel, forcing U.S. auto makers and other American metal fabricators to rely more on domestic steel suppliers.
Also, as the result of aggressive cost-cutting actions for most of this decade, domestic steel-making capacity fell to 112 tons a year in 1987 from a 1979 peak of 160 million tons. Thus, the supply-demand equation finally seems to be working in favor of the steel makers, analysts and industry officials say.
However, some U.S. auto industry officials said yesterday that steel makers may see an easing in demand for their product. Domestic auto makers likely will demand less steel in 1988 than they did in the last three years, industry sources said. New car and truck sales are expected to be flat, or even to decline, in 1988. In addition, domestic auto makers will rely more on captive imports, vehicles brought into the United States for sale by American car companies.
"We believe that the supply-and-demand situation" for sheet metal "will change," said Dan Marion, steel purchasing agent for Ford Motor Co. "The supply will increase because demand will be less," Marion said.
Ford and other U.S. auto makers will renegotiate their steel-supply contracts in the spring. The Bethlehem and USX pricing actions could have some effect on those contracts.