Steelmakers To Push Steel Prices Higher.

Some U.S. steelmakers are seeking their first price hikes in seven years from car manufacturers. The steel companies are pushing for increases of as high as 10 percent in their contracts with the Big Three, according to automotive and metal analysts, responding to a report in The Wall Street

The contracts run up to five years. Bethlehem Steel of Bethlehem, Pa., and National Steel of Mishawaka, Ind., confirmed they had negotiated higher prices, but declined to discuss details. U.S. Steel, AK Steel and Ispat Inland declined to discuss details of the negotiations, as did Ford and General Motors.

Automakers each year buy about 14.4 million tons of domestic steel, which accounts for more than half the weight of the average car, according to the American Iron and Steel Institute.

Long-term contracts with higher prices would be a boon to the industry, and help some companies emerge from bankruptcy. Steelmakers blame many of their problems on a flood of cheap imported steel. Some of these problems were softened by the higher tariffs on imported steel recently implemented by the Bush administration.

Analysts said the price hikes could increase the cost of making a car by as much as $50. A spokesman for AK Steel, said that after 20 years of flat prices it was time for something of a "price recovery." "I think automakers and other high-end users recognize the need for a strong domestic steel industry," he said. AK Steel, based in Middletown, Ohio, is the largest producer of coated steel for the auto industry.

This year, prices for cold-rolled and hot-dipped galvanized steel, the two main kinds of steel used by automakers, have surged more than 47 percent from $325 per ton to $480 per ton last month, according to London-based metals consultancy CRU International.

Tariffs on foreign steel that the Bush administration approved in March have helped the industry. Production also has declined, as more than 30 steelmakers contended with bankruptcy, including former LTV Corp. which was liquidated in December and its mills shuttered for five months, cutting about 4 million tons of supply. LTV has re-emerged as International Steel Group, but lost its contracts with automakers.

It is unclear whether Bethlehem Steel and National Steel will emerge from bankruptcy and smaller suppliers, such as Geneva, Acme and Gulf State Steel, have dropped out of the auto industry.