DETROIT -- Steel prices are rising again because of higher raw material prices.
But steel makers are debating whether underlying demand from the automotive sector will support higher prices. The debate suggests heated contract negotiations this year between steel makers and auto companies.
This month auto steel supplier AK Steel Corp. notified customers that it would raise sheet steel prices $40 a ton, effective immediately. And twice already this month, Severstal North America increased prices on noncontract orders. Both companies blamed raw materials for the higher costs.
Spot prices for hot-dipped galvanized sheet, the type of steel used on a car's exposed body panels, are expected to increase soon to as much as $900 per ton, according to the trade publication American Metal Market. Last September, the price was $580 per ton.
Automakers and parts makers typically pay less. They buy on annual fixed-price contracts negotiated throughout the year.