Steel rising - Ferrous - Brief Article

Recycling Today, Oct, 2002

The steel industry in North America has been battered for the past several years, but is finally enjoying some profitability. At long last in 2002, steelmakers were able to charge a little more for their products, and 2003 should also provide breathing room, according to presenters at the Institute of Scrap Recycling Industries Inc. (ISRI) Commodity Roundtables, held recently in Chicago.

Keith Busse, CEO of Steel Dynamics Inc. (SDI), Fort Wayne, Ind., credits electric arc furnace (EAF) steelmakers with keeping American steel companies competitive. At one of SDI's plants, "a ton of steel can be made with just .3 man-hours," said Busse, down from traditional levels of from three to 10 man-hours.

For 2003, "a lot of [SDI] customers are requesting yearly pricing at today's levels," said Busse. "The market for some time has been undersupplied," said Busse of U.S. manufacturers who use steel. Busse said he does not see cold-rolled steel rising to $400 per ton next year, nor does he see it falling to $250 per ton.

Steel industry analyst Michael Locker of Locker Assoc., New York, predicted "a very slow economic recovery; not one of any significant strength. We're not seeing major improvements in capital spending." He believes the uncertainty over the Iraq situation is part of the reason for the stalling recovery.

No. 1 Heavy Melt Composite Pricing
(Per gross ton, monthly average)

August 2001     $80.00
September       $80.00
October         $73.29
November        $64.97
December        $65.00

January 2002    $69.97
February        $76.58
March           $82.09
April           $92.03
May            $101.53
June           $101.60
July           $101.67
August         $101.67

Source: American Metal Market

Note: Table made from bar graph.