The activity seems to be taking place on a broad
front but with no specific pattern. 21/
In the first quarter of 1971, demand improved slightly
over the fourth quarter of 1970; buyers began hedge buying
against a potential steel strike on August 1, 1971.
Nonetheless, some limited and selective price shaving
continued through to March of 1971. After the imposition of
the voluntary quotas on steel imports in 1969 (which were on
a tonnage basis), foreign steel mills began shipping a larger
share of the higher pr iced spec ial ty steels. Stainless stee 1
proãucers felt the pressure of imports longer than the carbon
steel producers and two efforts to raise stainless steel prices
fell flat.
22/
Joslyn Manufactur ing Company failed in its effort to lower
stainless steel discounts from the reported 15 percent to 20
percent level to "more normal" levels. 23/ Universal Cyclops
Specialty Steel Division of Cyclops Corporation was forced to
rescind its 5 percent to 7.5 percent price increase on stainless steels with the exclaimer:
21/ "The Steel Market," Bulletin of the National Association
ÕI purchasing Management, Nov. 18, 1970, p. 3.
22/ "Steel Summary: Mini-Price War in Midst of Boom,. Iron
Age, March 4, 1971, p. 79; .Price Shaving Continues for Many
Basic Steel Products," Metalworking News, March 29, 1971, p.
17.
23/ "Joslyn Manufacturing and Supply Co. withdraw 5% to 6%
Price Increase on Stainless Steel Bars, Wire and Billets,.
Wall Street Journal, Feb. 5, 1971, p. 16.
-182-
Competitive action in the marketplace,
already
evident, not only drastically minimized the effect
of the increase, but would also serve to create
further competitive chaos in an already chaotic
market. ~/
From April througn July of 1971, demand surged in anticipation of a steel strike. Price discounts vanished and the
industry put through a 6.25 percent pr ice increase in sheet
and str ip products.
..~ .
After the steel labor negotiations were settled without a
strike, the industry announced, on August 2, 1971, an eight
percent across-the-board pr ice increase to take effect on a
staggered schedule from August 5 to December 1, 1971. However,
demand was very weak and wi thin two weeks Bethlehem deferred
its increase on cold rolled sheet until' February Ii 1972. 25/
Demand remained weak through November 1971, and secret
pr ice concess ions were ava ilable. One steelmaker was quoted
as saying that because of weak demand the:
quoted pr ice s i tuat ion is very weak and almost
mythical. It is so spotty it jumps allover the
place and depends on whether you're competing against
foreign mill deliveries or whatever. 26/
24/ . Cyclops Division Resc inds Boosts in Steel Pr ices,. Wall
street Journal, April 21, 1971, p. 3.
25/ .Slump in Orders May prompt Stee1makers to Follow
Bethlehem's Price Rise Delay,. Wall Street Journal, Aug. 16,
1971, p. 4.
26/ .Steel Pr ices are soft, Some Concessions Available in
Absence of Ordering sJrge,. Wall Street Journal, Nov. 8, 1971, p. 2. i
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Apparently steel distributors were doing the bulk of the
outright price discounting. The products most seriously
affected were hot and cold rolled sheets since demand from the
auto industry was low. Steel mills were also involved in
discounting during this time, but the discounts of the major
mills took the form of selling prime steel at secondary prices,
and the dropping of some extra charges. 27/
The Steel Committee of the N.A.P.M:' stated in their
December 1971 Bulletin:
The committee splits evenly on the question of
whether or not the latest price levels by major
mills are holding firm. The softness seems to
be in the form of concess ions on qual i ty or
extras rather the direct concessions. About half
of the committee members are finding that prices
by the smaller mills have not followed the lead
of the major producers. As would be expected,
this condition is found most often in the South,
where most of the smaller mills are located.
In referring to prices of steel distributors the Steel