Buy American, Wall Street says, but be ready to pay for it
Jul 01, 2008 | 06:07 AM
When "new domestic" automakers go shopping for steel, they don't have to look far. With a weak dollar, high ocean freight rates and higher prices abroad, there is plenty of incentive to source steel—even exotic specialty and high-strength steels—from domestic suppliers.
"I'd be very surprised if the new Americans are not working aggressively with domestic mills to increase the level of supply," said Mark Parr, an equity analyst at KeyBanc Capital Markets Inc., Cleveland.
North American mills have the know-how to produce advanced high-strength steels and ultra-high-strength steels, he said. It might just be a question of capacity—but there could be more steel available now than in the past, especially with the double whammy of weakness at Detroit's Big Three and the lengthy strike at American Axle & Manufacturing Holdings Inc., Detroit. "I don't know whether its a structural phenomenon or more of a short-term opportunity," Parr said. "In any event, I think any steel the domestic guys can produce is capable of finding a pretty happy home."....
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