“Prices reflected in 2008 quotations are based on current steel cost and may or may not be appropriate at time of order placement. Based on current market volatility please confirm pricing at time of ordering.”   See below.

 Higher coke, iron-ore prices expected to prompt increase of steel prices.

In continuing coverage from yesterday's briefing, the Wall Street Journal (4/8, B3, Matthews) reports that "[t]he world's steelmakers, already facing more than 65 percent increases in iron-ore prices this year, are expected to pay significantly more for a special coal used to make steel, as mining companies pursue hefty price increases for 2008." According to news reports, "South Korea's Posco, the world's fourth-largest steelmaker by output" has "agreed to pay about $300 a metric ton for coking coal compared with the current contract price of about $100 a metric ton." Analysts expect this price "to become an early benchmark for other continuing negotiations between steelmakers and mining companies over contract settlement prices for coking coal this year." The Journal notes, "The increase for coking coal signals continued profit momentum for mining companies holding sway over steelmakers in China, India, Europe, and, to a lesser extent," North America, "where steelmakers have more of their own mines. Standing to benefit most are big miners such as BHP Billiton, Rio Tinto, and Xstrata PLC, which are the largest sources of those raw materials."

        Because of the increasing raw material prices, the Financial Times (4/8, Blas) expects that "[s]teel prices are poised to rise further." According to analysts, "steel prices might need to rise up to 20 percent to cover the jump in coking coal cost." Steelmakers had already "raised the prices of their products 10-20 percent in February and March."