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‘Fake news’ finds its way into the darnedest places

May 02, 2017 | 08:00 PM | Thomas C. Graham

Individual steel companies elected not to comment on the article, except for Nucor whose spokesperson responded with the perfect answer . . .

A curious article appeared in the April 11th edition of The Wall Street Journal. It was headlined, “Steelmakers Press Luck on Pricing,” and carried the byline of one Bob Tita.

The thrust of the article was the steel industry had moved fast to raise prices after tariffs were levied against foreign rivals. (Duh?) It was suggested that the “quick” increase in prices had alienated some buyers, and the action threatened to short-circuit a steel market rebound.

Although the article acknowledged that steel shipments have been strong so far in 2017, it quotes several steel analysts as predicting steel demand will weaken later in the year. (That is not a risky projection—it happens every year!)

In reflecting on the intended purpose of the article, I find it a little puzzling that The Wall Street Journal would cast itself in the role of chiding the industry for price recovery actions after offenders were disciplined by tariffs. And even more puzzling that the Journal based its’ case on quotations from analysts, who were readily available and no doubt more than happy to be quoted.

Nowhere does the article actually suggest that the industry should not have raised prices. The criticism is apparently that the industry raised them 1) Too fast or 2) In too many increments or 3) Without seeking customer approval.

Steel prices, like any other action in a competitive market, involve a measure of trial and error. Golfers are all too familiar with the dilemma conveyed in the age-old adage “Ninety-five percent of short putts do not go in.”

Individual steel companies elected not to comment on the article, except for Nucor whose spokesperson responded with the perfect answer to a foolish question. Katherine Miller said the price increases were in order, after cheap steel depressed the domestic market. The duties, she said, “allow pricing to be determined by market forces and not be distorted by foreign government subsidies.”

While the motives prompting steel companies to raise prices are transparent, the unanswered question is what exactly did The Wall Street Journal intend to accomplish by publishing this peculiar article?

The piece wasn’t news worthy. And it definitely promoted a certain opinion—and not a particularly qualified one at that.

Customers are expected to be enthusiastic about price increases. Analysts have varying degrees of knowledge and expertise; and are wrong as often as they are right in offering gratuitous advice on industry activity. As someone once observed, they have “no skin in the game.”

For a news organization that prides itself on succinct comment – and usually delivers – this piece can only be charitably described as amateurish.


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