Steel costs. How prices of steel affect the auto part producers, and basic economic theories that apply to the case

Steel costs Steel costs threaten makers of auto parts. "Parts suppliers, always under pricing pressure from their customers, have so far had to absorb an astonishing 54 per cent rise in the price of hot-rolled coil steel since last June", (Porter I, 2004, 'Steel costs threaten makers of auto parts', The West Australian, p38). This presents a huge problem for the producers of auto parts, as they see their profits being eliminated, leaving them with two options. …

…short run, but not necessarily so, over the long haul. Reference list: Porter I, 2004, 'Steel costs threaten makers of auto parts', The West Australian, p38 Stiglitz, J, 2002, 'Globalization and its discontents', Penguin Group, London, p172 World Steel Dynamics, 2003, Retrieved: February 29th, 2004, from http://www.worldsteeldynamics.com/earlywarning.html Spain K, 2004, Induction heating, Furnace international, vo2, p12-16 Gans, J. & King, S. & Mankiw N. G., 2003, principles of microeconomics, Ed 2nd, Thomson, Australia