[TheForge] Stock prices?

[Ries Niemi]

My steel yard says price increases for the next 2 years are likely.

There are a lot of different things that all are happening at once,
that are causing this.

The declining value of the dollar against the euro and yen is one
thing- it makes imported steel more expensive.

The rapid increase in China's use of steel, both for export goods and
domestic products, is another. Right now China is using 30% of world
capacity, and that is rising all the time. I have heard stories of
scrap ships being turned around on the high seas and sent to China,
because they offered more than the original buyer.

The decline in US production capacity for steel is obviously another
factor- blame it on any of a bunch of reasons- high wages, huge
retirement and medical costs, bad management, lack of investment in new
equipment, boardroom shenanagins, no government industrial policy,
environmental laws, (although I have heard from an engineer who has set
up several very large factories in China that the Chinese are enforcing
strict environmental requirements on NEW factories there as well).
Blame it on the right wing. Blame it on the left wing. Blame it on
dirty words on the radio, or gay marriage. Dont make no difference- we
still have a lot fewer mills than we used to, and the number keeps
going down.

We are still tearing down US steel mills and shipping them direct to
China for reassembly.

Then there is plain old Greed- no steel yard I have ever heard of
prices things based on what they paid- they price stuff, new or used,
based on current commodity prices. So if they only paid .25 a pound,
and the price now is closer to .50, you are gonna pay .50.

No shortage of places to point the finger, but the result is the same
no matter what you think politically- steel prices are going up like
crazy. Here in the Pacific Northwest, the price increase in the last 6
months or so has been more like 30%, not double, but some things are
going up more than others. And a lot of companies have panicked, and
are stockpiling material in the expectation that prices will go higher.
This makes for shortages of certain things- I waited 3 weeks recently
for plain old 1 1/2" square tubing- and of course, it makes prices go
up even more.

One other negative aspect of this is that scrap prices have gone way up
as well. Now that is a little bit good- I take 1500lbs or so of scrap
to the yard 2 or 3 times a year. So now I can get enough money to buy
myself lunch when I do it. But all kinds of cool old junk, that has
been sitting undisturbed all over america, waiting for you and me to
find it and use it, rebuild it, forge it, or just enjoy looking at it-
that stuff is walking right over to the scrap yard, and hopping on a
train or boat to the nearest steel mill for remelting. I have heard it
is making a big dent on the supply of old lathes and machine tools, and
if it goes on for very long, the junkyard scrounging we have taken for
granted for so long may change dramatically.

Now, my big question- where the heck do you get 24 foot sticks of
steel? Almost everything I buy comes in 20 footers, except for
occasional pipe in 21's, and sometimes Aluminum or Stainless, which can
come in "random 20's" which often means 20 to 24 footers.
But I have never seen 1/2" square in 24's.

ries