Steel price rise predicted

Press, Volume CXIV, Issue 33533, 14 May 1974, Page 2

Steel price rise predicted

(New Zealand Press Association)

AUCKLAND. Mav 13.

It was unlikely that New Zealand would be able to isolate itself from overseas rises in the price of steel, the general manager of New Zealand Steel, Ltd (Mr J. H. Ingram) said today.

Speaking to the Auckland Rotary Club luncheon, he said Governments were starting to recognise that to ensure new investment and increased capacity in the steel industry, better profits were necessary.

The British Steel Company had just had a 25 per cent price increase, and United States prices were expected to rise soon by more than 20 per cent.

“It seems unlikely that New Zealand will be able to isolate itself from such cost escalation,” he said. The writing of the sales contract for Taharoa ironsands in United States dollars

had not been favourable to New Zealand Steel. Although one price adjustment to compensate partly for .exchange fluctuations was negotiated last June, further increases would be needed. Mr Ingram said that establishment of the Taharoa project and the expenditure there of nearly SBm in 17 months, demonstrated that it was possible to find markets for New Zealand minerals and develop processes for their efficient recovery without overseas equity participation. Overseas investment “should be limited to cases where it is essential from a

marketing, processing, or financial point of view,” Mr Ingram said. The development plans 'originally formulated by the New Zealand Steel investigating company and its consultants, and approved by the i Government, were being reappraised.

The New Zealand Steel board might make a preliminary announcement “before long.”

He added that capital costs for future development would be high. The company’s profitability would have to be such as to encourage further substantial investment in the industry. In such a case it was difficult to see the justification for holding prices of New Zealand Steel’s products at levels which were so far below those of comparable imports.