The temporary malfunction from yesterday is fixed. Sorry to those of you who were online when things went pear-shaped. However, Nerds is once more operating as it should. It’s also now running on the very latest version of WordPress so various things have been improved including the behavior of tags in the sidebar here.
Also, you will notice that when you go to a particular post (by clicking on the title) there is now a “print this” link at the top of the post. This allows a formatted, print-ready version of the post to boot so you don’t get all the sidebar data when you print. Finally, we’ve opened it up so that anyone can comment – you don’t have to be registered. So go comment crazy.
Reuters India has very helpfully provided a chronology of recent steel industry production cuts going back to the middle of September. This is the link to the article. While the FT today reports the slowdown of Chinese steel production. The essence of the FT report is this…
Shan Shanghua, secretary-general of the China Iron and Steel Association, said he expected China to produce about 500m tonnes of steel this year, up only 10m tonnes from last year and short of earlier forecasts of 520m-550m tonnes.
And this…
Mr Shan said Chinese mills had already begun contacting iron ore suppliers ahead of the 2009 price negotiations, adding that they would seek a unified price from Brazilian, Australian and Indian iron ore companies and would seek to unify spot and contract prices.
AK Steel reported Q3 results today. You can see the results here. EBITDA for Q3 was $246/ton while operating income was $210/ton. AK projects Q4 shipments will be down 5% and operating income will fall to around $100 per ton. AK’s results are tracked against its peers on the Nerds of Steel earnings spreadsheet.
Nucor and Steel Dynamics announced Q3 results last week. Nucor’s results can be found here and Steel Dynamic’s here. Nucor’s EBITDA was very strong at $206/ton and included for the first time a full quarter’s impact of the David J. Joseph acquisition. Steel Dynamics result’s were also strong, with EBITDA of $161/ton. Check out these results on the Nerds of Steel earnings spreadsheet.
Yesterday, I made a presentation at the American Metal Market conference on wire & wire rod. The title was “How low can we go?” and my purpose was to provide a few heuristics for relating GDP projections to steel demand, both globally and in the US. I tried to avoid making a specific forecast because of the uncertain prospects for the global and US economies. Unfortunately, one journalist in the room wrote an article giving readers the impression that I forecast low growth for 3-4 years. I did not. What I said was that if you want to use history to develop a worst case planning scenario, look at the period 1990-1994 when global steel demand declined for 4 out of 5 years. However, for the reasons cited by James Moss in a posting on this blog I don’t believe there is a very high probability of such a dire outcome.
US long products import licenses stayed low at 207,000 short tons in September, compared to August actual imports of 232,000 tons. Licenses granted up to October 15th indicate that rebar imports in October will decline significantly compared to typical monthly levels (16,000 tons of rebar licenses to October 15th compared to 83,000 tons of actual imports in August). In contrast, wire rod imports should increase significantly in October (78,000 tons of wire rod licenses to October 15th compared to 78,000 tons of actual imports for the whole of August).
