The metalworking activity index reached the strongest reading in April since May of 2000, but buyers are more concerned about runaway pricing for steel and base metals. In fact, almost 92% of buyers polled say prices were higher in April than in March, and nearly all fret about costs since metals prices are among the highest in three decades. "Business is solid right now," says a purchasing manager in California, "but domestic metals buying is wild and that could dampen the entire manufacturing sector."

Actually, metals buyers are far from happy about current market circumstances: Prices are too high, deliveries are too slow, and mills have a take-it-or-leave-it attitude.

"When purchasing of a variety of metals, such as carbon sheet, aluminum and stainless steel, we are incurring stratospheric price increases that we are told is the result of strong demand from China causing raw material shortages at the domestic mills," says a senior metals buyer in Illinois. "However, the mills don't really explain what's happening, are not honoring contracts and see this time as an opportunity to price gouge."

Many buyers also agree with his view that "mills have taken an adversarial relationship with their customers." By and large, buyers are angry about the levels of raw materials surcharges for carbon steel, insisting that the mills haven't justified these tariffs."