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Articles

IMF World GDP Growth Forecast

July 17, 2008

The IMF just released its latest World Economic Outlook. The WEO includes world gdp growth forecasts for 2008 and 2009. Not surprisingly, world growth is expected to decelerate to 4.1% in 2008 and 3.9% in 2009, compared to 5.1% in 2006 and 5.0% in 2007. What does this mean for global steel demand growth? The [...]

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Scrap or Pig – Iron is Iron

June 18, 2008

It used to be the case that minimills (scrap buyers) and integrated mills (iron ore buyers) had very different cost structures. Integrated steel producers’ costs were relatively fixed because iron ore and coking coal were sold on an annual contract basis and did not change much year to year. Scrap prices on the other hand, [...]

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High steel prices tell us what to do

June 9, 2008

Martin Wolf, as he often does, wrote an interesting column in the Financial Times recently called The market sets high oil prices to tell us what to do. As $1,000/ton steel becomes an accepted fact of life it’s worth asking what the market is telling us to do about high steel prices. Martin Wolf offers [...]

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Severstal’s acquisition of Sparrow’s Point

May 13, 2008

Severstal recently closed its acquisition of the Sparrow’s Point mill owned by ArcelorMittal.  The price paid by Severstal, $810 million, works out to just over $200 per ton of installed steel making capacity.  This is well below what assets have been selling for in North America.  As can be seen in the graph below, the [...]

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Is R for recession or resilience?

January 9, 2008

Goldman Sachs reported today that it believes the US economy will suffer a recession in 2008, and Goldman is not alone.  It seems everyone is worried about the impact of the credit crunch and high energy costs on US consumers.  So, what might a recession mean for shipments by steel producers in the US in 2008?  There is clearly [...]

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Global steel demand poised to grow along with GDP

December 18, 2007

Until a few years ago the steel industry was considered mature, and the moniker was accurate. Global steel demand grew more slowly than did the world’s population. In much of the developed world, demand for steel was stagnant after having gone through a long period of decline. Since 1998, however, the steel industry seems to [...]

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What’s in a Steel Price?

October 8, 2007

Lots of people involved in the steel industry have access to steel pricing information to follow trends in the industry or to drive their own steel selling or buying decisions. There are at least seven well-known publishers of steel prices. Their steel industry experts survey steel buyers and sellers, analyze the data, and come up [...]

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The best big organization will win

September 27, 2007

A senior steel industry manager who had just been offered a promotion to head office was reflecting on his choice. Looking for guidance, he asked a colleague for advice. ‘Just add value,’ was the terse reply. His implication of course was that corporate ‘overhead’ usually doesn’t. His deeper implication was that real value is only [...]

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