Posted on 11/23/2008 1:19:48 PM PST by dano1
Just weeks after posting record profits, steel makers are facing a harsh new reality: dwindling orders, production cuts, layoffs. And tougher times lay ahead, analysts say.
The steel industry had been riding high earlier this year, as surging demand from China and other countries, coupled with soaring prices for materials used in steel making, produced the most lucrative market for the metal in more than 60 years.
But the credit crisis and global economic slowdown have undercut customers in key markets — construction, automobiles and industrial equipment — sending prices tumbling and prompting steel companies to slash production, scale back shipment forecasts, delay expansion plans and furlough workers.
Lower revenues and more layoffs loom in the months ahead, and production may not return to levels seen earlier in 2008 for more than two years, according to some analysts.
"The downturn has been dramatic, both in the speed and the magnitude," said Christopher Plummer, managing director of Metal Strategies Inc., a consulting firm in West Chester, Pa. "It's quite concerning and alarming." ...
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Warming up for another bailout...
They found out that fire can’t melt steel.
When the prices drop low enough, I’ll get enough to work on a couple of projects the high prices prevented.
Charter Steel in Cleveland has throttled back big-time!
No kidding, like steel t-posts.
The industry simply ran prices up too far too fast when they had it good and are now reaping what they sowed.
Talk about a melt down, I bought AKS, AK Steel in February at $43 and sold it at $69 less than three months later. I looked at the stock last week and was shocked to see it was down to $6.00.
Once these plants started to come on line, the excess production capacity effectively drove the price back down again.
Interestingly enough China has little, if any, iron ore and gets much of its needs from Canada. The ore goes out the St Lawrence seaway, around South America and across the Pacific. My contacts there tell me the Chinese have contracted for every taconite pellet from there for years to come.
Auto manufacturers are the biggest purchasers of steel, so this is not surprising with the serious downturn in the auto market.
Jeeze, they don’t even use the panama canal? I would think it would be better for them to buy american ore and ship it down the ohio river into the gulf and through the canal. tHen maybe build a foundry somewhere in the solomon islands.
As far as the Chinese building elsewhere, well China like all of Asia, is built solely on the concept of economic nationalism.
It appears your info is incorrect.
http://en.wikipedia.org/wiki/Iron_ore
If iron ore is being shipped across the pacific from canada, then it is likely going to korea or japan. NOt china.
http://www.comp.nus.edu.sg/~ipng/mecon/cases/BHP.pdf
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