[TheForge] Stock prices?

Mon Mar 15 06:01:00 2004

Very well said Ries, I'm sure the raise in prices is due to all those
reasons you mentioned.  Did you mention aging population too.  This new
Global economy and so called Free trade will guarantee that we chase all
around the world looking for the cheapest goods, with one sad result being
we lose the capacity we once had to produce what we needed ourselves.
Perhaps in not too many years, we won't be producing any steel in North
America.

One crazy example of this new world we saw, was when visiting friends in a
Northern Quebec town that for years has been a huge source of copper.
Because of the large supply they built a smelter there and over the years
have modernized it so it is very efficient.  The cost of bringing the copper
out of the ground however has shot way up for various reasons, and it is now
cheaper to have copper shipped to the smelter from Australia and Chile than
to dig it up from right under the town.  

Our steel up here comes in 20 foot lengths too, except some of the specialty
houses sell in 12 ft lengths, never seen a 24 either.

Harry

-----Original Message-----
From: [email protected] [mailto:[email protected]]
On Behalf Of Ries Niemi
Sent: Sunday, March 14, 2004 9:10 PM
To: [email protected]
Subject: Re: [TheForge] Stock prices?

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

_______________________________________________
http://mailman.qth.net/mailman/listinfo/theforge
theforge mail list group photo site is
http://www.photoaccess.com
Login:  [email protected]
password:  anvil
___________