Rising steel prices affect bedding
By David Perry -- Furniture Today, February 23, 2004
HIGH POINT — HIGH POINT — Bedding component suppliers say worldwide forces in the steel industry are raising their costs and forcing them to pass on higher prices to bedding producers.
"An unrelenting upward spiral in scrap steel and rod prices is continuing to raise the cost of wire," said Jay Sanders, vice president and director of marketing in Leggett & Platt's Bedding Components Group. "Never before have we experienced such horrific inflation in wire/rod prices."
He added, "A root cause of this problem lies in the unprecedented amounts of scrap steel being exported out of the United States. In 2001, U.S. scrap exports were about 7.4 million metric tons; in 2003 those exports reached 12 million metric tons. This huge increase in scrap steel exports is attributable mainly to China and South Korea, who, among some 50-plus countries, now account for about 50% of U.S. exports."
L&P has raised steel prices about 10% since last fall and now sees a third increase. "We feel an obligation to inform you to expect additional significant price increases as early as March," Sanders said in a letter to bedding producers. He said the exact size of that increase has not been determined.
Hickory Springs announced steel increases of 8% and put them into effect this month.
"We expect more increases as the supply of scrap continues to dwindle," said Don Coleman, president. "At this time, we can only speculate as to the amounts and dates for future increases. However, they are meaningful and the critical issue is availability."
