Friday, October 1, 2010

Caterpillar to raise prices

NEW YORK: Caterpillar Inc, the world's largest maker of CONSTRUCTION [] and mining equipment, will raise its product prices worldwide as much as 2 percent next year.

The company said on Thursday, Sept 30 that the price increase will take effect in January.

"Caterpillar has talked about the potential for seeing some higher costs in the raw material side," Morningstar analyst Adam Fleck said by phone.

"Steel prices would be the primary focus ... and as they start seeing higher costs, they are able to typically pass it to the customer," he said.

Caterpillar also said that it will raise the prices of some products in some regions by 2 to 6 percent.

In a statement filed with the U.S. Securities and Exchange Commission, the company said those increases are "emissions-related."

The emissions increases would be for some products in the United States and the European Union where the emissions requirements take effect in January, a Caterpillar spokesman said in an email.

In 2011, the U.S. Environmental Protection Agency will release environmental regulations for most of the off-highway machines used in construction, agriculture and industry.

The "Tier 4" rules are intended to cut nitrogen oxide emissions by 50 percent and particulate emissions by 90 percent in 2011, with tougher standards phased in three years later.

Caterpillar said in December it had made "significant investments" to meet the new Tier 4 regulations and said that those investments would continue throughout 2010.

Caterpillar shares closed down 1.6 percent at $78.68 on the New York Stock Exchange. - Reuters


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