ArcelorMittal Plans To Boost Steel Prices By $250/Ton, Citing Energy & Raw Materials Costs - B'Berg

[hatrack]

April 16 (Bloomberg) -- ArcelorMittal, the world's largest steelmaker, plans to boost prices on some steel shipments in the U.S. by $250 a ton, or about 33 percent of current prices, to recoup surging costs for energy and iron ore. The shares gained.

The surcharge will be added to contracted orders of flat- rolled steel for shipment May 5 and later, according to an April 14 memo to sales personnel from D.G. Mull, executive vice president for sales and marketing. The Luxembourg-based company won't add the charge to spot sales or contracts that already allow prices to fluctuate, the memo said.

ArcelorMittal is trying to take advantage of soaring global demand to pass on higher costs for iron ore, the main ingredient in steel, and the energy to produce and ship the metal. U.S. prices for flat-rolled steel rose to $740 a ton in March from $665 a month earlier, according to Purchasing magazine.

``The key is going to be, does everybody else go along with this?'' said Charles Bradford, a metals and mining analyst at Soleil Securities in New York. ``You can bet that the auto guys are going to be yelling and screaming about it.''

EDIT

http://www.bloomberg.com/apps/news?pid=20601087&sid=aDu._MwuJHPo&refer=home

[Deja Q]

1. Pity we couldn't use the scrapped WTC steel.

:(

[Indydem]

2. There are no mills left to melt structural scrap on that scale n/t

[bananas]

3. "By the end of the year, the concept of fixed-price steel will be virtually done away with"

``By the end of the year, the concept of fixed-price steel will be virtually done away with,'' Applebaum said. ``The entire pricing mechanism was something that didn't exist until the commodity price deflation of the 1980s/90s, so it makes sense that this would disappear in the current environment,'' she said.

As Al Gore has explained over and over, this kind of cost variability is especially hard on nuclear power projects.