[TheForge] Fw: standard materials on hand

Sat Jun 13 13:29:54 EDT 2009

I live in the Steel Valley or the Ohio Valley, near the Ohio River, our steel plants are generally owned by foreign companies and are older mills. I think all of them are shut down at the moment, most likely for good.  The only steel in Pittsburgh is the Steelers football team. 

There are several very old iron bridges in my area that are slated to come down and I keep asking if I can salvage some of the metal, the demolition companies say I can, but they are not sure when they will have the money to take these bridges down.

Jerry

________________________________
From: David E. Smucker <davesmucker at hotmail.com>
To: TheForge <theforge at mailman.qth.net>
Sent: Saturday, June 13, 2009 12:49:54 PM
Subject: [TheForge] Fw:  standard materials on hand

Bob is right on.  As an example, bulk copper that had hit a high of $ 6000 
per metric ton got down to $ 3000 early this year and is now back up to $ 
5000.  Lots of reasons including the closing of mines because of low prices 
etc.  It is all the game of supply and demand.

Dave

--------------------------------------------------
From: "Schade" <schade at acegroup.cc>
Sent: Saturday, June 13, 2009 12:06 PM
To: "terry l. ridder" <terrylr at blauedonau.com>; "Blacksmithing List 
Sponsored by ABANA" <theforge at mailman.qth.net>
Subject: Re: [TheForge] standard materials on hand

>
> On Jun 13, 2009, at 3:05 AM, terry l. ridder wrote:
>
>> hello;
>>
>> given the low prices on metal in general i was wondering
>
> ______________
>
>
> This article is about stainless steel makers but it seems that the
> same dynamic would/could apply to plain steel. If so, todays lower
> prices could go away soon.
>
> Bob
>
> ______________
>
>
> JUNE 10, 2009
>
> Fixed Costs Chafe at Steel MillsCapital-Intensive Producers Are
> Raising Prices Despite Weak Demand
> By ROBERT GUY MATTHEWS
> BRIDGEVILLE, Pa. -- Many stainless steel makers, facing high operating
> costs, are increasing prices despite weak demand.
>
> "We are raising prices because of the increased costs of operating our
> mills at the current lower levels. We are not seeing an increase in
> demand," said Dennis Oates, chief executive officer of Universal
> Stainless & Alloy Products Inc. He has boosted prices 5% to 6% twice
> since the beginning of May.
>
> Universal isn't alone. Other producers in the capital-intense steel
> business are beginning to do the same. In April, Allegheny
> Technologies Inc., AK Steel Corp. and North American Stainless Inc.
> each said they would increase prices for some types of stainless steel
> about 5% to 6%. Last month, RathGibson Inc., a small specialty
> steelmaker based in Lincolnshire, Ill., told customers it was
> increasing prices 6% on average.
>
> "Unlike mill increases announced in recent years, this is obviously
> not driven by increasing global demand, but rather by fixed costs
> being proportioned across significantly lower demand," the company
> said in a letter to customers.
>
> To understand why steelmakers would raise prices when demand is
> terrible, it helps to understand modern factories -- and the operating
> demands of their equipment.
>
> At Universal's plant here a huge disk-shaped blower called a pre-
> heater shoots 2,300 degrees Fahrenheit hot air at a giant ladle that
> holds melting steel. The pre-heater must be kept running even if the
> plant isn't making steel. It is kept hot to prevent the refractory
> bricks inside from disintegrating.
>
> The same is true with the mill's baghouse, essentially a huge vacuum
> for pollutants. Its industrial-sized fans run continuously because
> turning the motors on and off can damage them. Whether the mill makes
> two batches or six of steel, the costs are the same.
>
> "We're getting pinched," said Mr. Oates.
>
> John E. Lichtenstein, managing director of Accenture's Metal Industry
> Group, said raising prices in this economy is a smart business move
> for some steel makers. In past recessions, steel mills would actually
> increase mill production, believing that selling steel cheaply at
> least brought in cash.
>
> The problem, though, is that sales prices eventually fell so low that
> the mills went into bankruptcy.
>
> "The whole mindset has been changed in the industry," he said.
> "Sometimes you have to accept the fact that raising prices is a risk.
> But you are better off not chasing that last sale to the bottom."
>
> The increases aren't industry wide, however, and steel prices in
> general continue a downward trend, with producers reducing or keeping
> prices unchanged.
>
> Mining companies, aluminum makers and other manufacturers with high
> material and production costs are grappling with the same issue, said
> Jason Goulden, vice president of research for Metals Economics Group,
> an information and consulting company. The stubbornly high costs of
> running mines and smelters has forced many miners to shut operations,
> he said.
>
> In the past, many producers would stay in business and continue to
> sell their commodities at lower and lower prices, hoping the market
> would turn upward in time to save their businesses.
>
> But the low prices and higher operating rates actually delayed
> recovery. "It is much better to have this type of reaction. Because
> when demand does return you will see a steeper increase in prices," he
> said.
>
> The world's steel plants are operating currently at less than 45% of
> capacity -- some of the lowest operating rates ever -- which has
> escalated production costs and led to huge losses.
>
> Universal Stainless said it lost $3.8 million in the first quarter of
> 2008, citing among other things, the costs of running its plants at
> such low operating rates.
>
> The losses come in spite of significant strides in the company's costs
> and productivity. Streamlined trucking routes and computer tracking
> systems have reduced delivery times by 10%. Universal now makes
> 100,000 pound batches of the most common steel product, instead of
> filling individual orders.
>
> Kevin Smith, a supervisor in the melt shop said he would rather have a
> bit more inventory of basic product that he knows he can sell, than
> have the cost of starting and stopping production for custom orders.
>
> Such changes, along with reduced overtime and shifts, should help cut
> costs by 25% from last year, a significant reduction but not enough to
> offset the 40% to 50% drop in sales.
>
> Universal's Mr. Oates said nearly all of his customers have accepted
> the price hike, although he acknowledges some are in financial trouble
> themselves and can't afford it.
>
> Steel service centers, middlemen who buy from the mills and sell to
> manufacturers, appear to be paying the higher prices, in part because
> they think they can pass them on and because they have fewer
> opportunities to find cheaper alternatives.
>
> "We should be successful at passing through the price increase," said
> Brian Deck, vice president of finance and treasurer at Ryerson Inc., a
> large Chicago-based steel service center.
>
> Mr. Lichtenstein of Accenture, said service centers have less
> opportunity to buy lower priced foreign steel. "The tightness of
> credit is straining the ability for service centers to buy material
> off shore."
>
> Steel buyers also are reluctant to place an offshore order that
> wouldn't show up in the U.S. for months.
>
> "You have no idea what the market is going to be 50 to 90 days from
> now. The last thing you want to do is pay for steel today and have the
> margin drop 20% to 30% once you get it," Mr. Lichtenstein said. Tom
> McCarty, owner of Westbrook, Conn.-based stainless steel service
> center McCarty & Sons Inc., said that he is paying more for stainless
> steel and is absorbing the costs because his customers aren't going to
> pay more. His profit margin is reduced, but he is still profitable, he
> said. "You see what the big guys are losing on the books."
>
> Write to Robert Guy Matthews at robertguy.matthews at wsj.com
>
>
> ______________________________________________________________
> TheForge mailing list
> Home: http://mailman.qth.net/mailman/listinfo/theforge
> Help: http://mailman.qth.net/mmfaq.htm
> Post: mailto:TheForge at mailman.qth.net
>
> TheForge mail list group photo site is
> http://www.photoaccess.com
> Login: blacksmithblacksmith at hotmail.com
> Password: anvil
>
> This list hosted by: http://www.qsl.net
> Please help support this email list: http://www.qsl.net/donate.html
> 
______________________________________________________________
TheForge mailing list
Home: http://mailman.qth.net/mailman/listinfo/theforge
Help: http://mailman.qth.net/mmfaq.htm
Post: mailto:TheForge at mailman.qth.net

TheForge mail list group photo site is
http://www.photoaccess.com
Login: blacksmithblacksmith at hotmail.com
Password: anvil

This list hosted by: http://www.qsl.net
Please help support this email list: http://www.qsl.net/donate.html