Analysts Differ on Bids to Prop Up Steel Prices

PITTSBURGH — After intense price cutting during a prolonged slump, the nation’s major steel producers are raising their prices again, but analysts differ over whether cheap imports and uncertain demand will let the producers sustain the higher prices.

“They’re going to give it a try. But there are no guarantees at all. The best you can give it is a 50-50 chance,” said Peter L. Anker, who studies the steel industry for First Boston Corp., a New York-based investment firm.

“With no surge in demand, the tendency is for people to be in the market competing to keep their mills as busy as they can. That led to the price erosion. That situation has not been resolved,” he said Thursday as industry leader U.S. Steel was announcing price increases for steel pipe.

U.S. Steel initiated the move to higher prices in mid-September, boosting sheet steel prices effective Jan. 1.

Others Follow

The increase was about 10%, according to Raymond J. Mucci, industry analyst for Baird, Patrick & Co. of New York.

LTV Steel, Bethlehem Steel and Inland Steel followed with their own price increases for sheet steel, which is used largely in automobile bodies and appliances.

In late September, National Steel and LTV opened a round of increases for tin mill products, used largely in food cans and other containers.

U.S. Steel and Bethlehem later moved to raise the price of bars, which are used in automobile and agricultural equipment parts.

And on Thursday, U.S. Steel added seamless and welded pipe to the list.

Much of the price changing was done through a reduction in published prices and a simultaneous narrowing of the heavy discounts that were being offered to customers who have been enjoying abundant supplies from domestic and foreign sources. The result was an increase in the actual cost to buyers.