Surging steel prices threaten US auto industry

Surging steel prices threaten US auto industry

Rising steel prices are pushing some of US auto suppliers to the brink of bankruptcy and threatening US automotive industry. US steel prices increased by 30% this year due to strong demand coming from China and South Korea and soaring domestic demand. The increase in steel prices has been perceived mostly by the smaller suppliers who are indefensible against the price fluctuations. However, this situation is gradually becoming an issue for auto manufacturers. This significant situation may also influence deliveries and give occasion to plants' shut down. In addition, automakers, who struggle to protect their margins, are refusing to pay steel surcharges. As previously reported by SteelOrbis, General Motors Corp. has filed a suit against its two suppliers, Steel Dynamics and Textron Inc. regarding steel surcharges. If the situation continues in this way, there will be shortages and disruptions in the market.