The iron age and after 1974

 Everyone expected the 30 percent to 40 percent auto
slowòown in (f) irst quarter 1974 (to) make more
sheets available for the generai sheet using market.
This has not happened. Automotive has continueà
to take the sheet allocated to them. They have
shippeò it to tneir overseas plants, sold some of
it to brokers, and passed some of it along to
their own subcontractors. . Little if any
additional tonnage is being offered to the
market. . . .
(Foreign) Pr ices for long standing good
accounts are apparently 30 percent to 50 percent above domestic with arising trend. Steel
for new accounts or sold by brokerS¡,Jl,ight be
double the domestic price or more. 46/
By August of 1974, with price controls lifted, the steel
mills rãisej 1 ist pr ices by 30 percent to 40 percent. The
Steel Committee reported in August 1974 that these pr ice
increases stuck. 47/
By the fourth quarter of 1974, demand began to weaken. It
did not weaken uniformly, however, and modest price increases
were announced in December 1974 for the two products in
strongest demand: plates anci shapes. 48/
Due to the differential impact of the scrap passthrough
permitt~d by the Cost of Living Council, a multi-tiered list
pricing schedule haò developed in January 1974. ~/ However,
46/ "The Steel Market," Bulletin of the National Association
õ1 Purchasing Managemènt, May 1974, p. 6.
~/ Ioià. Aug. 1974, p. 7.

"After Two Years Buyers are Back in the Drivers Seat,.
Iron~, Dec. 9, 1974, p. 44.
~/ "Steel Summary," Jron Age, Jan. 14, 1974, p. 57: "Six
More Steelmakers Lift ~Prices, Causing Rare Pricing
Chaos in the-Inàustry,~ Wall Street Journal, Dec. 31, 1973, p. 5 i
in the first quarter of 1975, firms, under demand pressures,
were shaving prices to meet the lowest quotes of competitors. 50/ Price shaving by minimills was reported
through the second and third quarters, while discounting
appeared in the specialty steel markets. 51/
In testimony before the International Trade Commission,
R. Simmons, president of Allegheny Ludlum, presented data on
his company's delivered transactions pri~es of stainless
cold rolled sheet in Chicago. These data show a cycl ical
trend: rising during the 1973-74 boom and falling during
the 1975 contraction.
On the basis of reports from American Metal Market and
the Wall Street Journal, Jondrow et al. (12) constructed an
index of percentage discounts from list during the 1973-75
period. Jondrow et al. report the appearance of price
discounts during 1975 on a composite index of steel prices
constructed according to the source of steel. These data
are reproduced below as table 4.7.
50/ "Softening of Steel Prices is Appearing on Some Steel
Items Due to Easing in Demand," Wall Street Journal,
Feb. 10, 1975, p. 2.
51/ .Some Small Steel Firms Offer Discounts to Cut Stocks,
Boost Sales to Auto Market,. Wall Street Journal, June 6,
1975, p. 3; "Price Cutting in Steel Develops; Demand Low,.
Journal of Commerce, July 3, 1975, p. 1; "Buyer Aware: How
Lloyd Konrad, A Purchasing Agent, Wheels for Good Deals,.
Wall Street Journal, 9ct. 7, 1975, p. 1.

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