Ah, but things were mighty different 11 years ago. The cost of the raw materials has sky rocketed. And I know I'm beating a dead horse - sorry guys - but here you go:
Quote:
ECONOMIC REASONS FOR STEEL PRICE SPIKE: CHINA
Despite the varying hypotheses for the recent spike in steel prices and the complicated set of domestic and international
factors, the majority of stakeholders recognize one common problem: The Peoples Republic of China. Since the mid
1990’s when China devalued their yuan by almost 80 percent and then pegged it against the U.S. dollar, there has been
a massive shift in the manufacturing of steel, away from the United States to China. Due to the devaluation of their
yuan, the United States trade deficit with China increased to $125 billion in 2003.
Moreover, China’s sharp economic growth has led to an insatiable appetite for steel. China’s enormous consumption
of steel has placed an incredible strain on the global raw-material industry. At the same time, China, which has traditionally been a source of low-priced coke, has placed restrictions on the amount of coke they can export. Chinese
coke prices have increased from $55 per ton to almost $300 per ton today. The sharp increase in the demand of raw
materials for steelmaking, including coke internationally and scrap steel domestically, has resulted in increased costs for domestic steel companies.
Taken off a report from the Associated Builders & Contractors Association.
