Most makers of durable goods will pass on rising steel prices to retailers, but the auto industry may have to absorb the higher costs at the expense of earnings, industry sources said.

Annual steel contracts for 2005 have risen by between 20 and 45 per cent and steel mills are under pressure to raise short-term and spot rates after price rises of more than 70 percent for iron ore and 125 per cent for coking coals, said a Reuters report.
“Depending on the product, long-term (steel) contract prices are up 20 to 45 percent, and as much of 80 percent of some steel mills’ output has been sold on long term,” one analyst said.
Appliance manufacturers said they were preparing to pass on higher raw material costs to their customers.
“We waited as long as we could, but we have had to pass on increased material costs to retailers. We are looking to raise prices between five and 10 per cent,” said Margaretha Finnstedt Moeller, spokeswoman at Swedish-based kitchen, cleaning and outdoor appliance manufacturer Electrolux AB.
“We are constantly investigating ways to make more effective use of steel and we are also looking at alternatives to steel and other material,” she added.
US conglomerate General Electric, which produces everything from refrigerators to aviation engines, said it had increased durable goods prices from the start of the year due to rising steel costs.
“We have worked hard to mitigate the impact of rising steel and other raw material costs on consumers by working aggressively to reduce operating costs within our business,” Kim Freeman, spokeswoman for GE Consumer and Industrial, said.
“However, despite our best efforts, we have had to increase prices to help offset the escalating cost of raw materials,” she said.
Analysts said rises in most other industrial raw materials and the cost of re-tooling to deal with new materials meant steel was hard to substitute.