It is delayed because the combination of the weak dollar/larger than expected trade deficit has resulted in much higher prices for producers who rely on imports.
Bond traders are about to be "re-educated", to put it mildly.
<Steel scrap prices in the United States -- measured by the benchmark "number one" heavy melt scrap -- doubled from 77 dollars a tonne in early 2001 to 156 dollars a tonne in December 2003 before skyrocketing to an unprecedented 302 dollars a tonne last month.>
http://story.news.yahoo.com/news?tmpl=story&cid=1518&ncid=1518&e=1&u=/afp/200403 09/bs_afp/world_steel_040309032337
Reuters
UPDATE - S.Korea producer prices see biggest jump in 5 years
Thursday March 4, 10:25 pm ET
By Oh Jung-hwa and Yoo Choonsik
SEOUL, March 5 (Reuters) - South Korean wholesale prices grew at their fastest rate in more than five years in February, the central bank said on Friday, underlining concerns over the impact of surging raw material prices on a fragile economic recovery.
The data came just a day after Finance Minister Lee Hun-jai warned higher raw materials prices, driven by hot Chinese demand, could slice one fifth of a percentage point off growth this year.
The producer price index (PPI), a measure of wholesale prices, jumped 4.5 percent in February from a year earlier, the strongest growth since November 1998, led by a surge in metal product prices by more than 20 percent from a year ago.
"If the producer prices continued to grow at this pace in the future, for about six months, for instance, it would be a significant threat to the consumer prices," said Cho Sung-jong, head of the central bank's statistical bureau.
"We are also concerned that shortages in these materials could affect production activities," he added, echoing analysts who say deepening shortages of steel scrap, steel bars and other materials could threaten the export-dependent economy.
On a monthly basis, the PPI grew 1.2 percent in February, the eighth consecutive month of gains and close to a 1.4 percent spike in January, which was the highest monthly rise since the 1997-98 Asian financial crisis, the Bank of Korea said in a statement.
South Korea has to import all its crude oil needs and has few other natural resources. The export industries that drive the economy, such as car makers and shipyards, are sensitive to raw material prices that have soared on strong demand from a recovering global economy and a growth surge in China.
Finance Minister Lee also said on Thursday stronger raw materials prices could lift consumer inflation by 0.2-0.3 percentage point this year.
The benchmark price for steel-reinforcing bars used in South Korea's construction industry jumped 24 percent in the year to February, while scrap steel prices have doubled, government data showed. World oil prices hit new post-Iraq War highs this week.
The booming Chinese economy, as well as a broader economic recovery have resulted in price rises and severe shortages for some materials, including steel scrap and copper.
Authorities in South Korea said on Wednesday exports of steel scrap and steel bars would be limited from next week until shortages eased in the domestic market. Steel giant POSCO (KSE:005490.KS - News) was also asked to supply more of its output to the local market.
South Korea's economy, in which exports and domestic consumption have almost the same weighting, flagged last year after a crash in spending by debt-laden consumers cut growth to an estimated 2.9 percent from 6.3 percent in 2002.
Bond traders are about to be "re-educated", to put it mildly.
<Steel scrap prices in the United States -- measured by the benchmark "number one" heavy melt scrap -- doubled from 77 dollars a tonne in early 2001 to 156 dollars a tonne in December 2003 before skyrocketing to an unprecedented 302 dollars a tonne last month.>
http://story.news.yahoo.com/news?tmpl=story&cid=1518&ncid=1518&e=1&u=/afp/200403 09/bs_afp/world_steel_040309032337
Reuters
UPDATE - S.Korea producer prices see biggest jump in 5 years
Thursday March 4, 10:25 pm ET
By Oh Jung-hwa and Yoo Choonsik
SEOUL, March 5 (Reuters) - South Korean wholesale prices grew at their fastest rate in more than five years in February, the central bank said on Friday, underlining concerns over the impact of surging raw material prices on a fragile economic recovery.
The data came just a day after Finance Minister Lee Hun-jai warned higher raw materials prices, driven by hot Chinese demand, could slice one fifth of a percentage point off growth this year.
The producer price index (PPI), a measure of wholesale prices, jumped 4.5 percent in February from a year earlier, the strongest growth since November 1998, led by a surge in metal product prices by more than 20 percent from a year ago.
"If the producer prices continued to grow at this pace in the future, for about six months, for instance, it would be a significant threat to the consumer prices," said Cho Sung-jong, head of the central bank's statistical bureau.
"We are also concerned that shortages in these materials could affect production activities," he added, echoing analysts who say deepening shortages of steel scrap, steel bars and other materials could threaten the export-dependent economy.
On a monthly basis, the PPI grew 1.2 percent in February, the eighth consecutive month of gains and close to a 1.4 percent spike in January, which was the highest monthly rise since the 1997-98 Asian financial crisis, the Bank of Korea said in a statement.
South Korea has to import all its crude oil needs and has few other natural resources. The export industries that drive the economy, such as car makers and shipyards, are sensitive to raw material prices that have soared on strong demand from a recovering global economy and a growth surge in China.
Finance Minister Lee also said on Thursday stronger raw materials prices could lift consumer inflation by 0.2-0.3 percentage point this year.
The benchmark price for steel-reinforcing bars used in South Korea's construction industry jumped 24 percent in the year to February, while scrap steel prices have doubled, government data showed. World oil prices hit new post-Iraq War highs this week.
The booming Chinese economy, as well as a broader economic recovery have resulted in price rises and severe shortages for some materials, including steel scrap and copper.
Authorities in South Korea said on Wednesday exports of steel scrap and steel bars would be limited from next week until shortages eased in the domestic market. Steel giant POSCO (KSE:005490.KS - News) was also asked to supply more of its output to the local market.
South Korea's economy, in which exports and domestic consumption have almost the same weighting, flagged last year after a crash in spending by debt-laden consumers cut growth to an estimated 2.9 percent from 6.3 percent in 2002.