AP Photo/Paul Sancya
- The UAW strike's ripple effects is decreasing the demand for steel, the Journal reported.
- The strike has cut production of 6,030 vehicles a day that used 5,982 tons of steel, S&P estimates.
- Prices of coiled sheet steel, commonly used to make automotive parts, have fallen 40% since April.
The UAW strike is hitting more than just car production and distribution. It's hurting the price of steel, too.
The strike has cost the Big Three automakers an estimated $1.12 billion in the first two weeks alone, according to Anderson Economic Group. Now in its third week, and with almost a fifth of the union on strike, the ripple effects are starting to materialize — and the US steel market is starting to feel the impact.
Spot prices for benchmark coiled sheet steel, commonly used to make automotive parts, have fallen 40% since April, the Wall Street Journal reported Monday. The American Steel Index has fallen by 5.92% in the past month.
Though the strike started in September, the steel market had began bracing for much of this year, depressing prices that were already recovering from slow demand during the pandemic. UAW members are asking for wage hikes, a return to traditional pension plans, and retiree healthcare among other demands.
According to the American Iron and Steel Institute, steel currently makes up about 54% of the material that goes into making the average vehicle. It goes into making the body of the car, mufflers, exhaust pipes and more. But with workers on strike are 43 facilities across the country, that's bound to slow demand for steel.
S&P estimates cited by the Journal say that so far, the strike has knocked out production of 6,030 vehicles a day that consumed about 5,982 tons of steel.
The automakers are yet feel sizeable impacts from the work stoppage, with third-quarter sales in the green. Ford reported a 7.7% increase in sales. General Motors' sales jumped 21%. Stellantis' was down 1%.