Manufacturing and steel prices

Steel bloggers have been commenting recently about steel costs as a percentage of total automotive input costs.

A very good paper published in February 2005 by Professor Peter Morici of the University of Maryland discusses steel prices in the context of US manufacturing costs in general. Morici concludes that US manufacturing is competitively disadvantaged by a very high dollar, by very high healthcare costs, by the high cost of lawsuits, and by the cost impact of strict environmental regulation - and that is it these factors, rather than high steel prices, that are responsible in the US for the demise of the manufacturing industry. You can find Morici's paper here: http://www.steel.org/pdfs/MoriciSteelPrices.pdf.

Steve at Steel Strip World makes reference to steel representing perhaps 2 percent of the cost of a typical car. Morici similarly estimates the figure at about 2.7 percent for motor vehicle production, and at about 3.1 percent for manufacturing industry in general. Whilst steel may be a critical material, its cost really is relatively small for most applications in which it is used.

blogger@steelonthenet.com

http://steelstripworld.blogspot.com/2005/07/auto-industry-comment-on-steel-prices.html