Steel prices rising

January 19, 2011
By: Vicki Bell

Being an editor means putting yourself out there for criticism. No matter how objective or neutral you try to be, chances are someone, somewhere will read something you write and say, "That's quite the mouthful ... please just tell me how you can make that statement?"  

How do I know? Because a "Stamping News Brief" reader wrote those very words to me last week in response to the January issue of the newsletter that featured some of the quotes included in the blog post "Metal stampers on reshoring."

The reader said, "We are a family owned stamping business that keeps on going. Although, sometimes I'm not sure which way our bottom line is going, we continue to keep many families fed. 

"I read your magazine religiously, and I am most hopeful when you are positive, BUT I think that to say manufacturing is coming back to America is 'quite the mouthful.'

"Please just tell me how you can make that statement as you watch prices of steel 'sky rocket' again. Thanks for your time." 

This reader failed to notice that the statements in the newsletter came from fellow stampers and not this editor. Nevertheless, the manner in which they were presented may have given the impression I personally think manufacturing is coming back to the U.S. After all, all of the quoted statements were positive about the reshoring trend continuing.

For the record, I am encouraged by the positive comments I've received about work coming back to the U.S., including some I received after the newsletter went out.

I responded to this gentle reader and asked if I could have permission to quote (pronoun gender withheld for anonymity) in the next issue of "Stamping News Brief," as all views need to be heard. I’m taking the lack of a response to my response as a "No." 

However, I feel this reader has made a good point that needs to be addressed. Raw material prices are climbing, and analysts and manufacturers are expressing concern their concerns about this trend. 

The article "U.S. Manufacturing Growth Is Up – Mostly Due to High Metals Prices?" published today on noted that "raw material price rises are up — and rising — across the board, and amid the gradual growth that manufacturing has been experiencing, this could be cause for concern." 

As noted in the article, "the Financial Times and Reuters have picked up on this with a raft of stories in the past few days, allowing readers to hear a host of industrial voices decrying the price increases. John Byrne, Boeing's director of commodities, and Chris Lidell, GM's CFO, both expressed concern that raw materials costs would cut into 2011 profits in a recent FT article. The largest metal components of the average car are steel, averaging 2,100 pounds, and aluminum, at around 400 pounds, according to the piece — and let’s not forget copper. David Leiker, an auto analyst at RW Baird, 'estimated that raw materials made up about $3,500 of a car that sells for $28,000.'" 

The article author concluded that "one of the bottom lines here is that we must watch steel closely as it comes out of its trough early this year, since it reaches across so many industries and shows up in so many finished goods." 

At least one "Stamping News Brief" reader is already watching closely, and I'll go out on a limb and guess many more are as well. In fact, if they aren't already doing so, I’ll make sure they put it on their radar as I cover this topic in the next issue.

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Vicki Bell

Vicki Bell

FMA Communications Inc.
2135 Point Blvd
Elgin, IL 60123
Phone: 815-227-8209