More problems for Mazda besides the fire
12-17-2004, 06:21 PM
#1
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More problems for Mazda besides the fire
this reuters story also says there is a shortage of steel which is causing productions delays. the fire on top of that is bad. on the upside maybe they'll have some steel reserve built up by the time the plant re-opens.
http://www.reuters.com/newsArticle.j...toryID=7107431
http://www.reuters.com/newsArticle.j...toryID=7107431
12-21-2004, 12:02 PM
#7
Mazda Mole
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It's across the board shortage, so everyone is in the same boat. Besides I hope steel reliant industries would have a backup plan by now. It's not like this is new news. Suppliers of metal components haven't been able to commit to quoted prices for a while now and they been making good money on selling scrap from their manufacutring process. These things should have tipped manufacturers off that big things are brewing.
12-29-2004, 09:31 PM
#8
VW coulda had it...
For those who don't know, one of the major factors is; the Chinese economy has been booming like crazy, and they've been buying up all the steel they can get their hands on for over a year. I work in the metal fabrication business and have seen the price of steel sheet or plate increase about twofold since August of 2003.
Hey, I can see it now: "Mazda rotary engine production resumes in Shenzhen China"!
Hey, I can see it now: "Mazda rotary engine production resumes in Shenzhen China"!
12-29-2004, 10:01 PM
#9
Get in ma belly!!
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Hey Zoom....what is the Roadstar sportscar? I guess the good news is this halt will only make our 8's more rare and possibly help retain a healthy resale value.
- Irish :D
- Irish :D
12-29-2004, 10:16 PM
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Found some of the articles on the subject...
Saying that rising steel prices were a concern for the auto industry during 2004 would be a little like saying Florida had a wind problem this year.
For many suppliers, it was the only issue. And for a few, it became an issue of survival.
First, a little perspective: Scrap steel, which is used in castings, rose from $230 a ton in January to $440 a ton last month. Higher-quality hot-dipped galvanized steel, which is commonly used for body panels, averaged $760 a ton during the fall, about twice what it was selling for the previous fall.
Because of long-term contracts with the automakers, some suppliers were not able to pass along price increases. But as those contracts started to expire this year, automakers, too, faced the reality that they will be paying more for steel - about 20 percent more in some cases.
The casting industry was particularly hard hit, and nowhere was that more evident than with North America's largest automotive casting company, Intermet Corp. of Troy, Mich.
Intermet, which sought Chapter 11 bankruptcy protection in September, says it can't keep selling parts below cost and is seeking court protection to dump what it calls "burdensome" contracts. If the court approves, Intermet could shed as much as 78 percent of its North American business.
Saying that rising steel prices were a concern for the auto industry during 2004 would be a little like saying Florida had a wind problem this year.
For many suppliers, it was the only issue. And for a few, it became an issue of survival.
First, a little perspective: Scrap steel, which is used in castings, rose from $230 a ton in January to $440 a ton last month. Higher-quality hot-dipped galvanized steel, which is commonly used for body panels, averaged $760 a ton during the fall, about twice what it was selling for the previous fall.
Because of long-term contracts with the automakers, some suppliers were not able to pass along price increases. But as those contracts started to expire this year, automakers, too, faced the reality that they will be paying more for steel - about 20 percent more in some cases.
The casting industry was particularly hard hit, and nowhere was that more evident than with North America's largest automotive casting company, Intermet Corp. of Troy, Mich.
Intermet, which sought Chapter 11 bankruptcy protection in September, says it can't keep selling parts below cost and is seeking court protection to dump what it calls "burdensome" contracts. If the court approves, Intermet could shed as much as 78 percent of its North American business.
Last edited by WHealy; 12-29-2004 at 10:18 PM.
12-29-2004, 10:16 PM
#11
Mr. Blue Man
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and ...
DETROIT -- U.S. automakers are confronting big increases in steel prices that will add more than $100 in costs per vehicle.
The Chrysler group has agreed to pay about 20 percent more on some of the steel contracts it negotiated this summer, industry sources say.
The automaker declined to discuss specific price jumps but acknowledged that steel costs are rising. "We are more or less realistic and recognize what has been going on with the steel market," says Chrysler group spokesman Ed Saenz.
American steel mills are demanding and getting price increases of 15 percent to 20 percent, says Charles Bradford, a steel analyst and the principal of Bradford Research of New York. This would represent the biggest increase in steel prices in decades.
A steel executive, who asked not to be named, confirmed those projections.
Although automakers use other materials, such as aluminum and plastic, a typical vehicle still contains at least $600 worth of steel. Thus, a 20 percent price increase would raise steel costs by $120 per vehicle - a substantial burden.
Expiring contracts
In the late 1990s, the price of steel slumped as steelmakers struggled with excess production capacity. Over the past two years, prices rebounded as steel makers shut down plants.
Now, demand for steel is rising. And the raw materials used in steel - such as coke, alloys and scrap - are getting more expensive.
Automakers with long-term steel contracts were able to shield themselves from volatile prices. But those contracts are starting to run out. Last week, Chrysler group CEO Dieter Zetsche told Automotive News that Chrysler's long-term steel contracts "expire in staggered waves."
Will Chrysler continue to negotiate three-year contracts at a time of record steel prices? It all depends, says Peter Rosenfeld, executive vice president of procurement and supply for the Chrysler group.
"Some (contracts) are longer, some shorter," Rosenfeld says. "It depends on how the supplier treats us and how they're performing." Chrysler renegotiated a quarter of its steel contracts this year, Rosenfeld says.
Automakers and suppliers are cutting back on long-term contracts this year, says Mike Petro, a steel expert with Ariba Inc. of Sunnyvale, Calif. Ariba is a software vendor that also hosts metals auctions.
Manufacturers are adopting 12-month and even six-month contracts, Petro says. Those who don't want to change steel companies every year are adopting contracts that allow them to negotiate steel prices for periods as short as one month, he adds.
No discussion
General Motors and Ford Motor Co. declined to discuss their own contract negotiations. Among the transplants, only Toyota Motor Manufacturing North America Inc. acknowledged that it is negotiating steel contracts.
But clearly the stakes are high for the entire auto industry. Automakers are facing stiff price increases for the high-grade sheet metal used for exterior body panels.
According to the trade publication American Metal Market, hot-dipped galvanized steel - which is commonly used for body panels - averaged $760 a ton in September. The price was only $384 per ton in the year-ago period.
The publication bases its figures on an index of spot and contract prices.
Sticker shock
The auto industry will try to ease the shock by negotiating volume discounts. Some automakers - including General Motors, Ford and Chrysler - operate steel purchasing consortiums to negotiate discounts for some suppliers.
But suppliers who aren't big enough to make bulk purchases will be in big trouble next year.
High steel prices forced Citation Corp., a Birmingham, Ala., supplier of cast, machined and forged parts, to seek Chapter 11 bankruptcy protection.
Metal-casting supplier Intermet Corp. also has filed for Chapter 11.
Last week, Delphi Corp. Chairman J.T. Battenberg III said he has a list of Delphi suppliers that are struggling with the rising raw-materials costs. Battenberg said he is trying to help those suppliers because "we don't want to shut down" the car manufacturers.
The auto industry can't expect much relief from their steel mills. For the first time in a decade, U.S. steel makers are enjoying fat profits after a wave of steel mill bankruptcies. Those bankruptcies have limited production capacity at a time when demand for steel is rising.
Newly militant
As prices of raw materials such as coke, alloys and scrap steel continue to increase, steel industry executives are newly militant.
Last July, AK Steel Holding Corp. CEO James Wainscott told industry analysts that he would seek substantial price increases. AK Steel is one of Chrysler's major steel suppliers.
Existing steel contracts with customers "are far too one-sided and something that we cannot endure during the next round of negotiations," Wainscott said.
Peter Peterson, the recently retired director of automotive marketing for United States Steel Corp., says that mood is prevalent among steel executives.
Peterson says negotiations between automakers and steel mills "will be the most balanced in the last several decades."
DETROIT -- U.S. automakers are confronting big increases in steel prices that will add more than $100 in costs per vehicle.
The Chrysler group has agreed to pay about 20 percent more on some of the steel contracts it negotiated this summer, industry sources say.
The automaker declined to discuss specific price jumps but acknowledged that steel costs are rising. "We are more or less realistic and recognize what has been going on with the steel market," says Chrysler group spokesman Ed Saenz.
American steel mills are demanding and getting price increases of 15 percent to 20 percent, says Charles Bradford, a steel analyst and the principal of Bradford Research of New York. This would represent the biggest increase in steel prices in decades.
A steel executive, who asked not to be named, confirmed those projections.
Although automakers use other materials, such as aluminum and plastic, a typical vehicle still contains at least $600 worth of steel. Thus, a 20 percent price increase would raise steel costs by $120 per vehicle - a substantial burden.
Expiring contracts
In the late 1990s, the price of steel slumped as steelmakers struggled with excess production capacity. Over the past two years, prices rebounded as steel makers shut down plants.
Now, demand for steel is rising. And the raw materials used in steel - such as coke, alloys and scrap - are getting more expensive.
Automakers with long-term steel contracts were able to shield themselves from volatile prices. But those contracts are starting to run out. Last week, Chrysler group CEO Dieter Zetsche told Automotive News that Chrysler's long-term steel contracts "expire in staggered waves."
Will Chrysler continue to negotiate three-year contracts at a time of record steel prices? It all depends, says Peter Rosenfeld, executive vice president of procurement and supply for the Chrysler group.
"Some (contracts) are longer, some shorter," Rosenfeld says. "It depends on how the supplier treats us and how they're performing." Chrysler renegotiated a quarter of its steel contracts this year, Rosenfeld says.
Automakers and suppliers are cutting back on long-term contracts this year, says Mike Petro, a steel expert with Ariba Inc. of Sunnyvale, Calif. Ariba is a software vendor that also hosts metals auctions.
Manufacturers are adopting 12-month and even six-month contracts, Petro says. Those who don't want to change steel companies every year are adopting contracts that allow them to negotiate steel prices for periods as short as one month, he adds.
No discussion
General Motors and Ford Motor Co. declined to discuss their own contract negotiations. Among the transplants, only Toyota Motor Manufacturing North America Inc. acknowledged that it is negotiating steel contracts.
But clearly the stakes are high for the entire auto industry. Automakers are facing stiff price increases for the high-grade sheet metal used for exterior body panels.
According to the trade publication American Metal Market, hot-dipped galvanized steel - which is commonly used for body panels - averaged $760 a ton in September. The price was only $384 per ton in the year-ago period.
The publication bases its figures on an index of spot and contract prices.
Sticker shock
The auto industry will try to ease the shock by negotiating volume discounts. Some automakers - including General Motors, Ford and Chrysler - operate steel purchasing consortiums to negotiate discounts for some suppliers.
But suppliers who aren't big enough to make bulk purchases will be in big trouble next year.
High steel prices forced Citation Corp., a Birmingham, Ala., supplier of cast, machined and forged parts, to seek Chapter 11 bankruptcy protection.
Metal-casting supplier Intermet Corp. also has filed for Chapter 11.
Last week, Delphi Corp. Chairman J.T. Battenberg III said he has a list of Delphi suppliers that are struggling with the rising raw-materials costs. Battenberg said he is trying to help those suppliers because "we don't want to shut down" the car manufacturers.
The auto industry can't expect much relief from their steel mills. For the first time in a decade, U.S. steel makers are enjoying fat profits after a wave of steel mill bankruptcies. Those bankruptcies have limited production capacity at a time when demand for steel is rising.
Newly militant
As prices of raw materials such as coke, alloys and scrap steel continue to increase, steel industry executives are newly militant.
Last July, AK Steel Holding Corp. CEO James Wainscott told industry analysts that he would seek substantial price increases. AK Steel is one of Chrysler's major steel suppliers.
Existing steel contracts with customers "are far too one-sided and something that we cannot endure during the next round of negotiations," Wainscott said.
Peter Peterson, the recently retired director of automotive marketing for United States Steel Corp., says that mood is prevalent among steel executives.
Peterson says negotiations between automakers and steel mills "will be the most balanced in the last several decades."
12-30-2004, 10:30 AM
#13
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Originally Posted by irish8
Hey Zoom....what is the Roadstar sportscar? I guess the good news is this halt will only make our 8's more rare and possibly help retain a healthy resale value.
- Irish :D
- Irish :D
miata roadster(hard top)?
12-30-2004, 10:43 AM
#14
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Thread Starter
most of this is tied to china. as mentioned above china is on a huge construction boom for the last 2 years and they are literally sucking the steel well dry. i have had companies we buy from not able to put out a new catalog with pricing because of the constant change in steel prices. one day this summer when they were trying to lock in a steel price - the price changed up 3 times that day.
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