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Gold/Mining/Energy : STE-TSE STELCO BALANCE SHEET IMPROVING -- Ignore unavailable to you. Want to Upgrade?

To: Stephen O who wrote (33)	3/2/1998 9:22:00 PM
From: phoenix_investor	Read Replies (1) \| Respond to of 46

More on price hikes. HR holding. CR questionable. Subject: Steelmakers see partial success with price hike Date: Mon, 2 Mar 1998 15:56:50 -0800 (PST) From: staff@quote.com To: quotecom-users@quote.com ============================================================ Is the market giving you mixed signals? Here's the green light. See our analysts top stock picks for '98. smithbarney.com ============================================================ News Alert from Reuters via Quote.com Topic: (NYSE:AKS) Ak Steel Holding Corp, (NYSE:X) Usx-U S Stl Group, (NYSE:BS) Bethlehem Steel, (NYSE:NUE) Nucor Corp, Quote.com News Item #5606522 Headline: Steelmakers see partial success with price hike ====================================================================== PITTSBURGH, March 2 (Reuters) - Domestic steelmakers are achieving some success with a price hike announced early this year, but a threats from imports and new capacity are keeping prices down on one major product line, industry sources and analysts said. Sources said producers are booking higher prices for hot-rolled and galvanized sheet steel but tags for cold-rolled sheet, typically a high margin product, are lagging behind. "The price hike on hot-rolled and galvanized seems to have stuck," said a purchasing manager at a Southeast steel distributor. "But it's not holding on cold-rolled." Steelmakers announced in January they would boost tags on hot-rolled steel by $10 per ton, on galvanized steel by $20 per ton, and on cold-rolled steel by $15 per ton. AK Steel Corp (NYSE:AKS) initiated the price hike, and was followed by all major producers, including U.S. Steel (NYSE:X) and Bethlehem Steel Corp (NYSE:BS). Despite continuing strong demand for all three products, the cold-rolled increase is precarious because of various market pressures, sources said. Chuck Bradford, an independent industry analyst, noted that eight million tons of new cold-rolled domestic capacity are scheduled to come on line over the next two years, making buyers fearful of oversupply and therefore reluctant to accept a price hike. Steelmakers have been increasing production of cold-rolled steel because of its typically higher price margins, but Bradford said that strategy is backfiring because the new supply threatens to bloat the market. "The steel companies are all trying to do the same thing, and they either don't pay attention to what the other guy is doing or they don't care," he said. Moreover, sources said the continuing financial crisis in Asia could send a heavy amount of lower-priced imports to the domestic market, also stopping buyers from accepting a price hike from U.S. producers. "A lot of (buyers) are looking at Asia and hearing about a lot of (lower-priced) cold-rolled offerings and trying to buy them," said Aldo Mazzaferro at Deutsche Morgan Grenfell. "Nothing has been delivered yet but I think in May or June we could see a real physical impact." Mazzaferro said imports could spell further trouble by setting the stage for price cutting by domestic producers later this year. "I really expect pricing to come down a little," he said. "Shipments from U.S. mills are very strong right now and they're succeeding with the bulk of the price increase. "But there's a storm cloud hovering over Asia and it's moving its way over here." However some industry officials said concerns about oversupply are overblown. "Everybody has overblown the supply situation," said John Correnti, president of Nucor Corp (NYSE:NUE). "Demand is still very, very good...and pricing is 80 percent demand driven, 20 percent supply driven." Correnti said the price gap between domestic steel and foreign steel is not as wide as many people might think, because domestic steelmakers over the past several years have slashed production costs and simultaneously improved quality. "I'm optimistic on pricing this year," he said. "I'd bet that prices will either stay the same or go a little higher. I would not bet that prices will stay the same or go down." Copyright 1998, Reuters News Service