The Future Of Steel Prices

SnowRidge · Jul 27, 2005

I spent several hours at the doctor's yesterday, most of it in the waiting room reading. /forums/images/graemlins/frown.gif

One of the business magazines--sorry, I forget which one it was--had a lengthy article on the Chinese economy. The author dwelt at length on the number of new plants coming on line, with still others permitted and on the drawing board, and yet more in the permitting process. Many of these were basic industries, such as ethylene (plastics feedstock), steel, semiconductors, and automotive. He also noted that rate of increase in their domestic demand has started to decline substantially.

He concluded that they soon will have a serious over capacity in these industries, including steel.

The obvious conclusion is China dumping steel on the world markets to keep the plants running, not to mention keeping all those workers from getting to upset when they discover capitalism includes layoffs. If that happens, it should be a substantial reduction in the price of steel, especially since the Chinese have taken steps to float the Yuan.

I'm keeping my fingers crossed.

daedong · Jul 27, 2005

<font color="blue">This is a monumental market for us," Mr Wale says. "We think China will grow by over 6.5 million (units by 2014), which is more than the next three (biggest growth markets) combined. China is where the growth is and this is where we've got to develop our game plan." </font>

This is an extract for the link below. I don't beleive demand is going to slow for a long time

web page

MadReferee · Jul 27, 2005

The price of steel here in the northeast has been fairly stable for the last 3-4 months. I have ordered over a ton since spring and the average price per lb has been pretty constant but the individual prices have varied. Certain types, tubing in particular, fluctuates more than others, probably due to supply and demand.

However, almost all of the stuff I get from my distributor has its origin in Canada. It's stamped/welded right onto the pieces. I guess it's just cheaper to import from Canada than find a mill here in the USA.

MikePA · Jul 28, 2005

<font color="blue">I guess it's just cheaper to import from Canada than find a mill here in the USA. </font>
Given you live in NH, the shipping charges are cheaper from a Canadian mill since they're probably closer than a US mill. A possible explanation?

jmc · Jul 28, 2005

Sounds like the Business Week article in the attached link. I'm looking forward to the gluts in steel and plasma TVs!

Business Week

John

SnowRidge · Jul 28, 2005

Yep, that was it.

daedong · Jul 28, 2005

Very interesting article /forums/images/graemlins/confused.gifvery different to what is often preached

Sigarms · Jul 28, 2005

Can't help but think that someone is B.S "en" someone somewhere.

We sell over 3,000,000 lbs per yer of "sheet metal" for the HVAC industry.

"Word on the block" from the manufacturers last year was that steel was a "hot commodity" (as bad as copper and freon) due to the demand FROM China (China was importing it all creating a HUGE demand).

Put things in perspective, from the beginning of last year to now, total increas was over 30%.

Funny thing was that fiberglass was "cheeper", but after the the increase in steel prices, low and behold, fiberglass pricing went up.

Imagine that.

Now, the price of metal has stabalized (sp?).

So, now China is going to "dump" steel in the world market when last year the pricing went "sky high" due to the demand from China?

MadReferee · Aug 16, 2005

I just got off the phone with my steel supplier and was informed that although prices have dropped almost 10% over the summer, a major price increase is coming September 1. It seems there will be a fuel surcharge tacked onto the prices of steel due to the cost of trucking both the raw materials and finished materials.

The salesman was not sure on exactly how much the increase would be but he did say the mills (including the Canadian ones) have already given written notice to the suppliers to expect the increase. He is informing his customers now so that they can make ordering decisions before the cost rises.