Stamping Out a Living

National Post
Higher electricity prices and rotating blackouts spurred by Ontario's power crunch could lead to lower productivity and lost investment, the province's largest industrial association warned yesterday.
'It's a major concern. Manufacturers' bottom line is under constant pressure,' said Jayson Myers, senior vice-president and chief economist with the Canadian Manufacturers and Exporters.
He said the rolling blackouts, which saw more than 3,000 customers in Ottawa lose power on Monday night, point to the fragility of the system, something that will deter investors.
'Manufacturers depend on a secure supply of energy just to keep production open,' said Mr. Myers.
'And you can't afford to shut down production if you've got brownouts or rotating blackouts or a major failure in the electricity system, so it's a threat of problem in the energy supply that's an investment issue,' he said. 'It already is becoming a consideration here in some investment decisions.'
As for the rising prices of power, such increases 'are one of the real problems that companies are facing at a time when you've got a higher dollar, competition from China, when you've got other costs going up as well,' he said.

Several stories this morning
China steel estimates surge, surplus seen
Yahoo! News
China will produce far more steel in 2005 than previously forecast, generating an unexpected surplus almost as big as the national capacity of Germany, estimates from a top agency showed on Wednesday.
Slowing growth in domestic steel demand, mainly from the property sector, was responsible, said the State Council Development Research Center, the cabinet's think-tank, spelling bad news for global steel makers dreading a tide of Chinese exports.
But the surplus is not going abroad just yet. Exports and imports would be about balanced, the think-tank said.

What are they doing about it?
China Announces New Tax on Steel Exports
Well, actually they are re-introducing a tax they had 7 years ago.
AP via Yahoo! Finance
China will impose a tax on some steel exports to slow their surging growth, the government said Wednesday, amid growing concern overseas that a deluge of low-priced Chinese steel will flood the market.
The 17 percent tax on high-end products will take effect Friday, the State Administration of Taxation said on its Web site. The step is a reintroduction of a tax that was repealed in 1998 in order to help Chinese steel producers compete in world markets.
A cut in steel production could help to reduce Chinese energy use and pollution by the steel industry, the statement said.
The decision follows China's recent agreement with the European Union to restrain the growth of textile exports amid complaints that low-priced Chinese products are hurting European, U.S. and other competitors.

I scanned a number of articles on this topic, and I can't find a definition of "high-end steel". Is that tool steel? Stainless Steel? High Carbon Spring Steel? Anyone know? Use the comment link at the bottom of the article if you have found an answer to this riddle.

And more plant shutdowns
Mittal Steel cuts output by 1 mln tonnes in Q3
Mittal's plans follow similar moves by other European steel makers, who last week announced production cuts for the third quarter in the face of sagging demand and high import costs due to the strong euro.
The production cutbacks will be equally split between Mittal's North American operations and those in Europe and elsewhere in the world.
"The production cutbacks that we have announced today will help to reduce the inventory build up that we currently have and help to restore equilibrium to the global supply and demand equation," [Lakshmi Mittal] said.

This isn't strictly speaking about steel, but I'm blogging, you're reading, on equipment based on the ideas of this guy.
Yahoo! News
Jack St. Clair Kilby, 81, died of cancer Monday at his home in Dallas, almost 50 years after his idea for what is commonly known as the microchip revolutionized the way that the world computes, calculates and communicates, ushering in the Information Age.

This is actually a pretty decent analysis (in overview) of what's happened in the last year. It's more from the perspective of a stock investor than a steel consumer, but useful none-the-less. And check out the links at the bottom of the article for other related articles.
The Motley Fool
Just as a steel shortage in the back half of 2004 triggered a price boom, increasing supplies have weighed prices back down. While world economic growth has been okay, it hasn't been strong enough to absorb all the new supply flooding the market.

The markets indicate that metals' latest cycle is finally coming to a head. Worldwide steel output has increased by over 8% through the first five months of the year, with Chinese output increasing over 27%. Even in the best of times, it's tough for the market to absorb that much steel. Consequently, prices have softened

China is the focus of the current problem: They're producing far more steel than anyone else. Although the Chinese government appears committed to the notion of slowing down economic expansion, the mills continue to churn out more steel, and China will likely be a net exporter this year.

Despite a surplus of steel, China has also found itself with a surplus of iron ore. China's iron imports have actually managed to exceed steel production, appreciably raising inventory levels at its ports.

As a result, iron ore producers report that the Chinese are rescheduling shipments -- trying to push them back and delay receipt. So while major iron ore producers managed to secure massive iron ore price hikes only a few months ago, they're now forced to sit and wait for China to accept the ore they contracted to buy.

I know for most of you, Stelco is just another minor steel company. But for us in the Greater Toronto Area, Stelco is that minor steel company just down the highway an hour or so in smelly Hamilton.

Well, OK, it's hard to separate that from the other smelly place just a little furthur down the road in Buffalo. They smell the same way and for the same reason - blast furnaces.

But for the last year or so, a court and media battle rivaling, in it's own way (considering it's "just" steel and not murder), O.J. Simpson and Michael Jackson has been going on here. I mean, how often do you hear of a bankrupcy court judge criticizing both parties and saying there seemed to be 'a complete lack of communication, co-operation and common sense by everyone? For that matter, how often does a bankrupcy court judge say anything worthy of media attention?

So a year ago, the judge appointed a mediator. He did some mediation, left, came back for some more. This week, he quit. The impasse at Stelco Inc. appears too thorny to resolve -- even for a former Ontario court judge hailed as a "genius" at mediation. He "threw up his hands in the mediation talks between the fractious Stelco stakeholders". Today the judge extended bankruptcy protection by a mere 10 days, ordering the stakeholders to "cool off until July 4 and then resume talks"
"We have been in this process 17 months; we don't need a cooling-off period," Steelworkers lawyer Ken Rosenberg argued in Farley's packed, stifling courtroom.
"We need to be put in a room and the door has to be locked."
The judge added that "the idea of a locked room is very appealing,"

What will happen next? Both sides are happy to tell their side of it to the media, stock holders and anyone else who has a web browser. Check out the Stelco Corporate media releases. Looks like one every couple of days. The steel workers are also at it.

But who can sort out all the conflicting claims? Not me. Nor, it seems, can the mediator. Or the judge.

Stay tuned for the next episode of ... as the steel turns.

Labels: stelco

Lots of steel news for a Monday morning, but let's start with this one, probably the biggest in my inbox this morning:

just-auto.com
'There will be no more multiyear contracts,' said Freek Schut, Corus' automotive commercial manager. 'We are now quoting prices on a yearly basis and we are not even quoting for 2006 yet.'
A European supplier executive, who didn't want to be identified, said that many multiyear contracts that ended last year have already been converted to three- and six-month contracts.
Arcelor has a number of three-year contracts with automakers that end this December. 'We will renegotiate these in the latter part of this year,' said Patrick Seyler, Arcelor's corporate communications executive vice president.
'Last year's price movements made us question whether three-year contracts without adjustment clauses were realistic in such a volatile environment.'
The steel maker's policy has been to have three-year contracts with automakers and yearly deals with auto industry suppliers.

The changes in steel supply contracts will be bad news for automakers as it makes their forward costs less predictable, but suppliers could be worse hit.

Well, is it bad news for everyone else? At first blush, it seems to me over the last 2 years that the "good deal" for automotive was bad news for everyone else. Since such a major component of the steel market was committed to one price, any input cost increases had to come out of the "other guys", that is to say, little companies like mine. Ultimately, our customers paid that price. Now, if the steel companies are allowed to raise prices for everyone in a timely fashion, like yearly, that should reduce the unreasonably high "speed bumps" that we experienced recently. Or am I missing something? Anyone with more of a background here care to speak up? Use the comment box at the end of the article.

Then there was this article:
Governments thwart steel's success

Daniel DiMicco castigated world governments who use their power to interfere with the steel markets.
The governments of the world must maintain a level playing filed[sic], said DiMicco, vice chairman, president and chief executive officer of Nucor Corp., the nation's largest minimill operator.
"We can compete with any steel company in the world," he said.
"But we can't complete with any government. We'll be a leader in the fight for fairness in trade, and we won't be alone."

Brave words. But when even the supposedly free-trade Bush dips his axe into the pot and stirs, how much are other governments going to resist?

He went on to say
the company isn't blind to the risk of global overcapacity. Overcapacity is largely the result of government ownership and outdated, extremely inefficient facilities, he said.

It is? Where is there such a problem with government ownership? Even in the Ukraine they're busy privatizing all that stuff, and it's been done most other places. I can't think of any government owned steelmakers in North America. Government interference I'll grant. But ownership? I must be missing something.

Here's an example of government interference, big time:
China Cancels Subsidies to Iron And Steel Industry They've been subsidizing their heavy industry for years. This is one of several reforms, too slow in coming, but still good that they're coming at all ... from Yahoo! Asia News
China will no longer reduce or exempt VAT for enterprises producing special purpose steel, according to a recent decision by the Ministry of Finance and the State Administration of Taxation.
Such enterprises will start paying VAT starting from July 1 this year.

Here is some privately sponsored "market leveling": POSCO, world's fifth-largest steel maker, to cut stainless steel output on oversupply

detnews.com
The company said it plans to cut about 3,500 jobs in its automotive divisions. The cuts include previously announced plans to shutter its Hawesville, Ky., automotive plant, as well as cutting 2,500 jobs in its AFL automotive wire harness business.

Besides the cuts in its automotive businesses, Alcoa said it plans to cut 1,000 jobs at its extrusion plants in the U.S. and Europe, which make fabricated aluminum; trim 1,500 jobs from its packaging and consumer business, which includes Reynolds Wrap aluminum foil; and cut 490 positions in its primary metals and global mill products divisions as well as some corporate jobs.

[...]
Alcoa spokesman Kevin Lowery said the aluminum maker has been hit by North American automakers scaling back production amid slumping sales.
Earlier this week, Ford Motor Co., the nation's No. 2 automaker, announced it was cutting another 1,700 salaries positions atop 1,000 salaried job cuts it announced in April. Ford's U.S. business was off 4 percent through May.
Meanwhile, General Motors Corp., the No. 1 automaker, has announced it would close plants and eliminate 25,000 jobs over the next three years. General Motors said U.S. auto sales were down 5.2 percent through the first five months of the year.

Then there's a bit of a discussion about all the incentives the car companies are offering.

Ford is offering employees and retirees up to $1,000 in cash to entice friends, relatives and neighbors to buy vehicles with employee discounts. General Motors has tried to boost sales by offering customers the same discounts it gives its employees.

No evaluation of this strategy, though. I'd be curious to know how long this kind of "pipeline stuffing" can go on. In general, this is a good short term strategy but in the long term a recipe for a bigger collapse when it comes. Is there something about the auto industry that makes this more than just putting off the inevitable pain for a bigger crash later?

Some other articles about where the car companies are going with their incentives programs and with their layoffs are to be found here:
GM may extend employee discount through end of July
Ford is cutting 1,750 salaried jobs, may cut factory jobs next this article touches on other car companies too, and starts out with an interesting graph that takes some time to interpret.

Reuters via CNN Money
plans to cut another 5% of its work force in a second phase of restructuring.
Aluminum producer Alcoa Inc., which already cut 1,800 jobs this year, said on Thursday it will eliminate a further 6,500, or 5 percent of its global work force, in a second phase of restructuring.
In January, Pittsburgh-based Alcoa said it was streamlining operations to fit its new global business structure and improve efficiency. In the first phase of the restructuring about 1,800 jobs were eliminated in the first quarter and Alcoa recorded after-tax restructuring charges of $25 million, resulting in an anticipated $45 million pretax of annualized cost savings.
The combined first-half restructuring is expected to cost between $245 million and $275 million, affect about 8,300 positions in total, and save $195 million before taxes on an annualized basis, Alcoa said.

Bizjournals.com (via Yahoo) added this
about 3,500 of the job reductions will come in the automotive business.

Steel Technologies is a service center
bizjournals.com
the altered expectations resulted from market inventory adjustments and slowing demand, as well as declining prices and increased margin pressure.

Well, we haven't seen any evidence of this so far, but we are only occasional buyers of copper, so we may have missed it ...
Bloomberg.com: Latin America
Copper prices fell in New York for the second time in three days amid expectations that mining companies are boosting production as demand for the metal declines.
Global demand for copper fell 5.5 percent in the first quarter from a year ago, the International Copper Study Group said this month. Copper smelting capacity in China, the world's biggest consumer of the metal, may double in the coming years, a government agency in China said today.
``We are moving into a significant surplus as demand is slowing and supply rising,'' said James Gutman, a London-based metals analyst at Goldman Sachs Group Inc. Prices may fall 26 percent by the end of the year, Gutman forecast.

Labels: Copper

AP via Yahoo
The company now sees shipments about 10 percent below prior guidance, and expects continued declining prices to add to margin pressure over the short term.

File this under health and safety risks of steel making ...

Yahoo! News
Men who work in the steel industry and are exposed to high temperatures are prone to develop kidney or urinary stones, according to a report from researchers in Brazil.

Skipping down a bit ...

The team found that low levels of citrate in urine occurred more often in men in the hot-area group than those in the room-temperature group (56 percent versus 28 percent). Men in the hot-area group were also twice as likely to have low urine volumes. Both these conditions are involved in stone formation.

To minimize the risk of kidney stones for people who work in a high-temperature environment, "it is important to encourage the workers to increase their ingestion of liquids during the period of heat exposure," Andreoni's team advises.

They also say that, to offset low citrate levels, "the use of diluted potassium citrate in the water the workers drink could be recommended; lemonade could represent another source of citrate."

MEPS STEEL NEWS
Vertical integration by steel companies upstream into raw materials has not been given importance for many years. Long-term supply contracts with annual price adjustments were felt to be adequate to prevent shortages - especially as those price adjustments were often reflective solely of steel companies? ability to pay.
But now things have changed dramatically. Last year?s shortage of iron ore has made it a valuable commodity. And the three companies who now control more than 70 percent of supply are cashing in.

and nearer the end of the article

[...] iron ore investments are suddenly back in fashion. New iron ore projects in Australia, Africa and South America are being funded partly by steel companies. Some in the iron ore industry say this shows the market is working as they should – the price has risen in order to generate the funds needed to expand production capacity.

But the oligopoly of the Big 3 may not have done itself many favours by this year’s price hike. In the short term their profits will benefit, but long term they may lose market share. Diversity of supply used to be one of the basic principles of the steel industry’s raw material policy, and the mills’ new investments in iron ore seem likely to go increasingly into projects that will compete with the Big 3.

fortwayne.com
Even the most bullish analysts are downgrading steel-company shares, noting that oversupply has led to an eight-month decline in steel-product prices. Steel stocks are about 30 percent off their 2004 peaks. And the slump doesn't appear to be over yet.
In this tough environment, many of the most vulnerable steel-related stocks are the middlemen, known as metal service centers

“Usually, what they try to do is get rid of inventories before prices fall. They didn’t get a chance to do that.�
Service centers and their customers participated in a steel-buying frenzy last year, creating shortages and high prices. Now they have a surplus of steel they bought at high prices, which they are forced to sell on the spot market at declining prices. The price of hot-rolled steel coil, a common product, has fallen for eight consecutive months to about $500 a ton in June on the spot market, down from a peak of more than $750 a ton in September.

Yabut ... surcharging allowed the same service centers to raise the output price of steel they had bought in a previous month where the surcharge was lower, so now with surcharges dropping, they have to sell inventory that they bought at a higher surcharge level. They got to bank that extra income ... .

And it's an interesting observation ... service centers contributed to the buying frenzy last year ... creating shortages and high prices. Of course, part of their job is to buffer the market from the pretty much steady-state steel production. So were they doing their job of buffering, or were they actually being hyper-reactive and contributing to the crisis?

How does one even assess this?

BEIJING, June 22 Asia Pulse No new harsh macro control policies, particularly those targeting at the iron and steel industry, are likely to come out in the foreseeable future, as the harsh policies implemented since the spring of last year have already begun to hurt the steel industry and may even threaten normal operation of the national economy.

the number of iron and steel enterprises in the red has risen quickly and the industrys profits have plunged

I thought the measures were originally taken because the steel industry was threatening the normal operation of the national economy. ...

Forbes.com
[Lakshmi Mittal, the billionaire chief executive of Mittal Group] said that further consolidation in the industry would be required to allow steelmakers flexibility to get to grips with the cyclical nature of the market. 'Cyclicality in the steel industry will never disappear in its entirety. Nevertheless it can and should be managed.' Steel prices have tailed off in recent weeks--this after producers had seen record prices and profits over the past 12 months. 'Today's softening of the market is not due to any sudden drop in demand but due to an inventory overhang situation created in the market. This situation can be better managed with consolidation of the industry,' Mittal was quoted as saying in media reports. The steel magnate expects future demand in the steel industry to be driven by the "BRIC" countries--an acronym for Brazil, Russia, India and China.

centralohio.com
Dave Moore, president of the UAW Local 4104, said the employees are 'very scared.'"

Alan McCoy, company spokesperson and vice president of government and public relations of the company, said Friday the plant will "idle its rolling mill starting June 26."

The mill, which processes stainless products for the automotive industry, will be shut down for an indefinite period of time, according to McCoy.

McCoy would not commit to how many employees would be affected or how long the rolling mill would be shut down. However, he did say the layoffs are a result of the weakness in the automotive industry.
Condensing the rest of the article, this plant can only do one grade of steel, and other plants in Coshocton are more flexible and can do more grades of steel, so when things are slow, they'll reduce work in the less flexible plant.

When car companies sneeze, smaller metal stampers all over the place catch colds. For that reason, we all watch what the car companies are doing ...
The players:
Jim Kaster, president of UAW Local 1714 at GM's Lordstown Complex
Guy Briggs, GM group vice president of manufacturing and labor relations

Act I
Tribune Chronicle
Jim Kaster said Guy Briggs left telephone voice messages at UAW locals to assure them talks were continuing.
Briggs didn't give details of the talks, but said workers will be informed as soon as issues are resolved, Kaster said.
'I think he's very optimistic,'' Kaster said, adding he believes Briggs is 'fed up'' with media reports in Michigan that the two sides aren't talking.
Kaster said his 1,650 members in the Lordstown West metal stamping center don't want their leaders to give concessions to GM, which lost $1.1 billion in the first quarter ended March 31.
GM says it spends $1,500 on each vehicle it makes to pay for worker health care, a bill it says it needs to cut to compete with foreign automakers whose health costs are lower.
'We want to see GM start making right decisions to be competitive,'' Kaster said. 'Let's not put it on the backs of the people working every day. We want to see GM invest money in profitable companies that are going to make money.'

Act II
Also the Tribune Chronicle
Possibilities that General Motors Corp.'s Lordstown Complex might get another car to build remain just that, company and union leaders emphasized Monday.
Pam Reese, spokeswoman for GM's manufacturing operations, said from Detroit that she was surprised by the certainty of The (Cleveland) Plain Dealer report that cited unidentified sources saying the automaker plans to make the all-new 2007 Saturn Ion small car at Lordstown.
"Nothing has been announced on any plans that were stated in the article. It's pure speculation. It surprised me,'' she said.
As spokeswoman for GM manufacturing in the U.S. and Canada, Reese said she would be "pretty tied in if we had something to announce or there were some plans that were definite.''
Lordstown Complex spokesman Tom Mock said, "It's not a lock'' that Lordstown will build another car in addition to the brand-new Chevrolet Cobalt the factory starting producing last October.
He said the company constantly does manufacturing feasibility studies, which he said was done at Lordstown in the first three months of the year.
[...]
But a new car eventually will land in Lordstown if United Auto Workers leaders at the two Lordstown locals have their way.
Jim Kaster recalled GM leaders saying a year ago the complex possibly could get another vehicle if it got its quality up.
"There's nothing concrete,'' he said, although he said he believes the complex has "a good shot at the Saturn'' because workers and managers have shown with the Cobalt that they can work together to successfully launch a new car.

And then there's some talk about how Lordstown could be fitted with flexible manufacturing to build multiple streams of cars without large changeovers, all the rage in the industry at present.
And after spending $1 billion, including $200 million for a paint shop, to prepare Lordstown to build the Cobalt, GM needs to find ways to make sure it gets a return on its investment.
Doing the math, March was a good month for Cobalts. GM sold 14,000 of them. Annualized, that's 168,000. 5 years of such sales is about 840,000. 5 year ROI isn't bad. But that's still $1200 per car just for the plant refurbishing. One certainly hopes they can build more than just Cobalts there, or that Cobalt sales still have a long way to climb.

For the copper users amongst us (I just bought some and caught a severe case of sticker shock) ...
LONDON, June 17 (Reuters) - Copper prices continued to test new record highs on Friday, with the market jumping to $3,400 a tonne on the London Metal Exchange (LME) after floor trading, as funds invested in a market dominated by tight supply, traders said.
Three months prices rose $83, or 1.5 percent, after hitting the previous record of $3,388 at Friday's kerb close.

The London Metals Exchange web site has a neat little graphing tool you can interact with here. Stick in your timeframe and it will show you copper prices over that time period. So, for instance, in Oct 2001, the price of copper, cash contract, was between $1300 and $1400. It bumbled around under $2000 until 2003. Starting in June or so of that year, it started rising. By October it had hit $2000. For most of 2004 it played around with the $3000 mark and for all of 2005 it's been over $3000. So it's more than doubled in 2 years. Pretty amazing.

As recently as May of this year, it looked like it was going to drop, but then it took off again at the end of May and has been climbing ever since.

Labels: Copper

herald-dispatch.com
Union representatives for workers at the AK Steel plant in Ashland say they want some equipment upgrades and a larger work force as contract negotiations began this week.

Among the union demands include making improvements to a blast furnace union representatives say is long overdue. The blast furnace should be relined with brick every five to seven years but hasn’t been done at the Ashland plant for 21 years, said Pat Roberts, treasurer of USWA Local 1865.

AK Steel officials say the plant is safe, and the company is upgrading equipment.

The current climate in the steel industry has raised concerns with both the union and company. Many of the sites where AK Steel’s competitors closed in the past five years were reopened with much smaller work forces and costs, McCoy said. This has made the steel industry very competitive, he said.

"Those facilities have an employment cost advantage over AK Steel, some by $40 per ton," McCoy said.

Last week it was a furnace. This week a rolling mill.

The AK Steel plant in Zanesville will idle its rolling mill starting June 26, according to company officials.
Alan McCoy, company spokesman and vice president of government and public relations, said the mill, which processes stainless products for the automotive industry, would be shut down for an indefinite period.
McCoy said he could not estimate how many employees will be affected because some will be reassigned to other parts of the plant, some will be on vacation and some will train for new positions.

There's this summary of recent shutdowns from the Northwest Indiana Times

The Region's steel production has fallen by almost 20 percent since early February and further cuts are expected as steel prices and orders continue to decline.

Steel production in the Northwest Indiana/Chicago area fell to 416,000 tons during the week ending June 4, from 537 tons for the week ending Feb. 12. For the same weeks, national steel producers decreased the amount of the capacity they used utilization by 10 percent from 91.2 percent to 81.2 percent.

Both Mittal Steel USA and U.S. Steel Corp. Gary Works have shut down blast furnaces in the past few months to cut production of hot metal.

U.S. Steel shuttered its huge No. 13 blast furnace in May, several months earlier than scheduled. The furnace is the largest of the company's 11 operating blast furnaces, is being rebuilt at a cost of about $260 million and is expected to reopen as No. 14 in early November.

The article goes on to detail all the furnace shutdowns. You can read the details there. And that's only one part of the US.

Scotsman.com
TWO of Europe's biggest steel-makers [Corus and Arcelor] have announced further production cuts in the face of challenging trading conditions which include declining demand and higher imports.
But the recent softening of the strong euro was likely to curb imports, according to industry analysts.
A spokesman for Arcelor said the company would continue the pattern of the first half by cutting steel production in the third quarter.
But he added that the fourth quarter should show a recovery in demand.
Meanwhile, Corus pledged to cut production by 160,000 tonnes per month for the third quarter, compared to the 70,000-tonne reduction for the second.

A fellow steel blogger maintains a web site of steel information here. It's quite useful. Check it out. He calls it the most complete guide to hot and cold rolled steel strip on the internet . And it certainly seems quite complete. Lots of good articles on how it's made, and so forth.

It is, however, somewhat Euro-centric. When you go looking for service centers, for example, you find lots in Europe, some in the United States, and none in Canada. But you probably know who your local service centers are. I find the European equivalent of SAE1050 (or whatever) is the most useful part.

Oh, and did I mention the price? It's free!

I gotta say, this is kinda neat. One wishes it was sooner than 2017 (I'll probably just be retiring then), but it's neat anyways.

A few years back, I visited another stamper (they made big stampings and wanted us to make some small ones) that stamped soup pots and fry pans out of aluminum. They, of course, stamp big circles and generate a lot of scrap. They took the scrap aluminum, crushed it slightly so it took up less space while waiting, then fed it into their own little furnace, melted it down and re-rolled it. Total turnaround time - less than a day until the scrap re-appeared as new coil on their stamping line.

The furnace was inside their facility. It was hot in that area, but nothing you couldn't stand near for a while.

Try doing that with steel ...

Press Release
Alcoa announced today that its researchers have developed a global sustainability model that forecasts the use of additional recycled metal and the use of aluminum in the transportation market will make aluminum greenhouse gas (GHG) neutral by 2017 - making the aluminum industry the first in the world that can establish the claim.

[Randall M. Overbey, president, Alcoa Primary Metals Development, said] "Given the great attributes of aluminum - it is easy to recycle, strong and yet lightweight - the industry will be able to reach a climate neutral state by 2017. There's no other industry that we are aware of today that can make this claim, which will help solve global warming."

Today seems to be safety (or lack thereof) day.

Northwest Indiana Post-Tribune
U.S. Steel union workers battled with management in February to shut down Gary Works? No. 13 blast furnace after finding ?numerous cracks? they said caused poison gas to reach up to 18 times its permissible level.
This is the same blast furnace where a Valparaiso man died of carbon monoxide poisoning in December 2004, and where three contractors were seriously injured in January after being overcome by the gas.
The company report, which was given to the Indiana Department of Labor and obtained by the Post-Tribune, shows that the blast furnace was eventually shut down at 7:30 a.m. Feb. 14, more than 18 hours after the safety representative made the recommendation.
The blast furnace was shut down about three weeks ago for a major renovation. Workers are rebuilding it and will rename it blast furnace No. 14. But union workers contend the furnace should have been repaired much earlier.

And then

An explosion at Wheeling Pitt sends at least three people to the hospital.
WTRF
It happened at the Wheeling Pittsburgh Steel Cogeneration plant in Mingo Junction late Tuesday afternoon when three contract workers were outside the plant testing a gas line when they saw a flash. Wheeling Pittsburgh Steel spokesman Jim Kosowski says he was told the injuries were minor, but we do know all three of them were taken to local hospitals. Production at the plant never stopped.

After a year of reading these kinds of reports and trying to figure out what it all means, I've come to the conclusion that it matters greatly who is talking, where they are talking and whom their comments are really addressed to. This "steel prices will come back" talk I've heard in the last while seems to be only coming from steel companies, and only when talking (directly or indirectly) to their shareholders.
Business Report
Johannesburg - Global steel prices were likely to rise in the third quarter of this year and stay up to the end of the year, Davinder Chugh, the chief executive of Africa's biggest steel maker, Mittal South Africa, said on Friday.

Chugh forecast stronger local demand in the second half of the year compared with the first half, driven by South Africa's push for infrastructure projects worth billions of rands and by fresh construction in the run-up to hosting the soccer World Cup in 2010. He said steel prices might stay weak until then.

'Although the underlying steel demand is still fairly strong, buyers of steel are holding off with their buying decisions in expectation of a drop in prices.

'It is our view steel prices will start to increase again in the third quarter of 2005.'

He said that steel prices had stopped rising as companies in Europe and North America reduced their inventories and as demand slowed in the Far East, especially in China, but that this would be short-lived.

'Historic levels of 2004 may, however, not be seen in the short term. Substantial price increases for raw materials like coal and iron ore will provide a support to steel prices.'

For example, MEPS (an independent steel consulting service located in England but providing consultancy around the world) wrote this month about the North American market:

The North American flat products price fell by 5.5 percent in May. This was substantially more than our expectations when we prepared the last forecast. An inventory overhang continues to plague the market and has put extreme pressure on steel selling prices.

It is now clear that the stock levels throughout the supply chain were higher than was being admitted earlier in the year. Moreover, they are being unwound at a much faster rate than previously envisaged as customers are placing orders only to fill gaps in their inventories. The price trends for the commercial grades of plate are coming into line with strip mill products - partly as a result of strong import pressure.

We forecast further price deterioration in negotiations up to the end of the year. Demand is not likely to pick up over the next six months. The inventory depletion phase is expected to last until near the year end. We anticipate an upturn in prices as the Spring approaches in 2006.

The North American long products price in May held up slightly better than we envisaged. This was the result of the increase in scrap surcharges compared to the previous month, the seasonal pick up in real demand and inventory reduction.

The scrap surcharge is likely to decrease once again in June. Consequently, our forecasts for the four main long product categories to May 2006 remain virtually unchanged from the previous month's figures. A steady decline in transaction values is anticipated for wire rod, structural sections and merchant bars. A seasonal upturn for reinforcing bars is likely soon.

Now, for most stampers, who use coil stock, the part you care about the most is the "long product" section. "Flat products" are sheet and plate - basically quite different paths through quite different equipment after it leaves the blast furnace. So the different forms of steel actually follow different paths after processing, and delays and capacity issues in the later processing form slightly different sub-markets, with their own pricing and lead time differences.

Well, he's a little lighter reading the for the weekend.
I thought Peregrine Falcons were southern birds (I've previously seen, from a fair distance, protected nests while hiking in California), but it seems they have a wide range.

Chicago Sun-Times
Three peregrine falcon chicks have hatched in a nest at the U.S. Steel mill along Lake Michigan.
The chicks were given a health check and tagged last week by a team led by John Castrale, a bird biologist with the Indiana Department of Natural Resources, and Mark Happer, the Gary steel mill's wildlife habitat coordinator.
The chicks were hatched in the middle of May, according to the wildlife biologists.
U.S. Steel put up three nesting boxes in the early 1990s, Happer said. Since then, 36 falcons have hatched there.

Checking this out some more, I found the Canadian Peregrine Falcon Foundation which includes a lot of background information about the birds, and webcams that take pictures of the birds in their nests and refresh them on the web site every few minutes.

I was both right and wrong in remembering them being mostly found in the south ... from the 55 Water Street site:

The decline of the Peregrine began after several years of widespread applications of organo-chlorine pesticides (DDT) following WWII. DDT residues causing eggshell thinning altered the reproductive behavior of the falcons and resulted in death. By the early 1960's there were no breeding pairs left in the eastern U.S. down from an estimated 450 pairs. They were placed on both the Federal and State Endangered Species Lists in the early 1970's. Intensive endangered species ordinances were put into place and the species has remarkably recovered. There are 15 territorial pairs of which 13 bred successfully in 2001 in New York City on bridges and buildings. The falcons are drawn to the city by the cliff-like topography of high-rise buildings and by the plethora of food (pigeons, sparrows, starlings, etc.).

Well, it looks like the large scale shutdowns of operating mills "to keep the price of steel high" has started.

It's also an interesting question (to me as an outsider anyways) - if bringing slab (which is awfully heavy) from other places is cheaper than operating the furnace, why is the furnace there in the first place? They aren't shutting down the whole place, just the blast furnace.

AP Wire
Mittal Steel Co. is shutting down its only operating blast furnace in West Virginia for eight to 10 weeks, laying off 700 workers at its Weirton mill until business picks up, the company said Thursday.
That's one-third of the current work force at the Northern Panhandle mill and the first layoffs of permanent employees since now-defunct International Steel Group bought the former Weirton Steel Corp. in May 2004.
'I am concerned by this temporary shutdown, but I am not surprised,' said Mark Glyptis, president of the 2,100-member Independent Steelworkers Union. 'We understand the steel market is going through a gradual slowdown and price decrease. Hopefully, this layoff and partial shutdown of our blast furnace will be short in duration.'
Crews will prepare for the outage over the next few days, said Bill Brake, Mittal's executive vice president of operations for the East.
'We'll bring it back up when the market tells us that the time is right,' he said.
Mittal had already planned a plantwide vacation for the last week of July. Brake said the remaining Weirton workers will manufacture products using slabs from other Mittal operations.
Word of the layoffs came just days after the furnace was brought back online from a nearly two-week 'banking.' When a furnace is banked, it's filled with raw materials and kept hot inside so it can be brought back into production quickly. Workers used the down time to repair, clean and paint the mill.
This time, the furnace will sit cold, requiring about a week to restart.

It's very interesting ... of the major canadian steel mills, Dofasco has emerged healthy after going through a round of bankrupcy stuff. Mostly you hear from them only when they're doing good stuff.

Now Stelco, just down the road from us in Hamilton, on the other hand, you hear from every other day getting into a fistfight with their union publicly and splatted across several web sites. In fact, the supervising judge for the bankrupcy had to discipline them both at one point, saying something to the effect that he doubted either one was really operating in good faith.

Reuters.com
TORONTO, June 9 (Reuters) - Dofasco Inc. plans to acquire most of the remaining interest that it does not already own in Quebec Cartier Mining Company for C$306 million ($245 million), and may spin off the unit, Canada's second-biggest steelmaker said on Thursday.

"Given the rapid change in global iron ore markets and the pricing outlook, it will be prudent for Dofasco to hold equity in QCM at a level sufficient to hedge our iron ore purchases," Pether said in a statement.

QCM produces iron ore products in Quebec and operates an open pit mine, crusher/concentrator facility, pellet plant, deep-water harbor and a railway linking the mine to the harbor on Quebec's North Shore region.

The announcement conference call is happening even as we speak, and the stock has already risen 7% on the morning, so something good must be happening there!

[It's now 9PM EST and the stock rose a total of 10.6% on the day]

Labels: Dofasco, stelco

This matters to metal stampers because so many have at least partial tie-ins to the automotive industry
AP via Yahoo
Shares of auto parts makers rallied on Wednesday, a day after car and truck parts supplier ArvinMeritor Inc. issued a positive earnings forecast, citing better operational performance and strength in the commercial vehicle market.

Its bullish outlook sent shares of other auto parts suppliers higher, with American Axle & Manufacturing Holdings Inc. rising 7 percent, and Dana Corp. 8.9 percent. Both were also among the NYSE's top percentage gainers in afternoon trading.

"We believe ArvinMeritor has the potential to see one of the greatest shifts in investor sentiment within the supplier group," securities firm Robert W. Baird & Co. wrote in a client note on Wednesday. Among other things, the brokerage cited new management at the company, and recent moves to exit non-core businesses and improve its capital structure.

Shares of auto parts suppliers have slumped since the start of this year, as the nation's top two car makers General Motors Corp. and Ford Motor Co. have grappled with rising costs, losing market share, and bonds recently reduced to "junk" status.

Several suppliers have declared bankruptcy in recent months, underscoring the dire financial situation facing those companies that are heavily exposed to the beleaguered domestic automaking industry. Collins & Aikman Holdings Corp. was the latest to file for Chapter 11 bankruptcy protection in May.

However, some analysts are starting to take a slightly more positive view of the auto parts sector. In a note to clients on Tuesday, Merrill Lynch predicted suppliers' earnings "should stabilize" after the third quarter, due to recent production cuts at both GM and Ford.

There are two proposals being considered at the moment: CAFTA and FTAA.
CAFTA: Central America Free Trade Agreement
FTAA: Free Trade Area of the Americas

I don't understand the link with China, though.

Yahoo News
The Bush administration has been struggling to drum up votes for the U.S.-Central American Free Trade Agreement, or CAFTA, in the face of stiff opposition from unions, sugar farmers and many textile companies.

The pact would eliminate tariffs on U.S. exports to Costa Rica, El Salvador, Honduras, Guatemala, Nicaragua and the Dominican Republic, while locking in the trade preferences those countries are enjoy in the U.S. market.

Republican leaders in the U.S. House of Representatives may have to back legislation prodding China toward a more flexible exchange rate as part of their efforts to attract votes for a free trade pact with Central America, House Ways and Means Committee Chairman Bill Thomas said on Tuesday.

It's become "very difficult for (many lawmakers) to vote on a trade package without getting some kind of meaningful response on the issue of China.

NEW YORK (MarketWatch) - Goldman Sachs analysts cut their view of the steel sector Tuesday, saying prices could stay below $500 a ton through summer due to the U.S. dollar's recent rise and high inventories.

In another research note Tuesday, Goldman Sachs raised Allegheny Technologies Inc. (ATI: news, chart, profile) to in-line from underperform.

"We expect continuing strong demand and pricing for ATI's high-performance aerospace metals, and steady results in other metals and stainless steels," wrote Mazzaferro.

The reduced view of the steel sector should not affect the call on Allegheny, he said, as the company's product mix avoids carbon steel entirely. Only about 15% of Allegheny's sales are in commodity stainless, which itself is much stronger than carbon steel, Mazzaferro added.

We reported the GM cuts earlier, but here are some interesting statistics I hadn't seen before. Incentives amounting to $5,000 per vehicle! I had no idea it had gotten so high.
indystar.com
Because UAW labor contracts discourage layoffs and plant closings, the Detroit automakers can't simply shut down their factories. Changes require UAW approval.

GM's plan, presented by Chairman Rick Wagoner at the annual shareholders' meeting in Wilmington, Del., follows a $1.3 billion first-quarter loss. GM has been propping up car and truck sales with heavy incentives that now surpass $5,000 per vehicle on average.

Although it has plenty of cash to stave off bankruptcy, GM's falling market share has left it with too much production capacity even as it shells out $1,500 per vehicle to cover the health care costs of employees, retirees and dependents.

Earlier this year, GM executives pressed the UAW to renegotiate health care coverage, but union chief Ron Gettelfinger declined. The union said the nation ought to reform its health coverage rather than force workers to pick up higher costs.

Now GM is angling to come back to Gettelfinger with demands to first close plants and cut jobs, then bring back the health care issue, possibly before the 2007 labor contract talks open. GM's medical plan covers about 1.1 million employees and retirees, including an estimated 50,000 in Indiana.

What's opened the way for Wagoner to push for both job cuts and health concessions at the same time is Las Vegas casino mogul Kirk Kerkorian. He's been amassing GM shares, leading to speculation he could lead a takeover of the automaker and oust Wagoner and his executive staff.

While GM's stock is worth less than $20 billion, its various elements such as Allison Transmission in Indianapolis, OnStar safety network and its pickup truck plants could be sold off in pieces by Kerkorian, bringing in more than $70 billion.

"What GM in effect is telling the union is, with Kerkorian in the picture, who would you rather deal with, Kerkorian or us?" said David Cole of the Center for Automotive Research, a think tank in Ann Arbor, Mich.

June 7 (Bloomberg) -- General Motors Corp. Chief Executive Rick Wagoner said the world's largest automaker will cut at least 25,000 U.S. manufacturing jobs in the next three years and close additional assembly and parts plants to cut costs.
The undisclosed plant closings will generate an estimated savings of $2.5 billion a year once complete, Wagoner said in a speech at the GM annual shareholder's meeting in Wilmington, Delaware today.
GM has ``a tremendous amount of overcapacity and fixed cost,'' said Mirko Mikelic, a senior portfolio manager who oversees $14 billion in bonds at Fifth Third Asset Management in Grand Rapids, Michigan. ``This is something he has to address.''
Wagoner is seeking to return the automaker to profitability following its biggest quarterly loss in 13 years and a 6.7 percent drop in U.S. sales this year. The company's shares are down 24 percent so far in 2005.
Analysts including UBS Securities' Robert Hinchliffe in New York said GM needs to cut as many as four plants to reduce capacity. The company has demand for 5 million of its cars and trucks, while its factories have the capacity to make 6 million. GM may make a decision on its plants in the next two quarters, according to New York-based Prudential Securities Inc. analyst Michael Bruynesteyn, who rates GM ``neutral weight.''
The automaker cut North American production 12 percent in the first quarter and plans a 10 percent reduction this quarter. Another 9 percent drop is slated in the third quarter after U.S. sales in May fell for the fourth month in five this year.

CP via Yahoo! News
TORONTO (CP) - Canadian steel giants Stelco Inc., Algoma Steel Inc. and, to a lesser extent, Dofasco Inc. will all see their margins pressured through the rest of this year by rising input costs and steel prices that have fallen off cyclical peaks, according to a new report on the sector.

Dominion Bond Rating Service said the impact of rising iron ore and coal costs will be "most notable" at the three integrated steel producers through the remainder of 2005, given their exposure to those commodities.

Stelco and Algoma use significant amounts of coal in their blast furnaces during the steelmaking process. Dofasco is less sensitive to iron ore and coal price shifts given that they use more natural gas in their manufacturing processes.

The higher input costs come as steel prices have fallen from 2004 highs posted last fall.

But weaker industrial demand, increased exports from China and high inventory levels have contributed to a steady decline in benchmark U.S. flat-rolled steel prices, according to DBRS steel sector analyst Jarrett Bilous. Flat-rolled steel prices are now 35 per cent below August 2004 levels, reflecting a market correction, Bilous said.

Industry observers have said steel prices are now well below $540 US per ton, compared to $640 US per ton at the beginning of this year. Current prices will likely remain stable through the rest of this year, Bilous said.

Labels: Dofasco, stelco

Reuters via Yahoo News
Beijing aims to cap the country's long-term annual steel production capacity at 300 million tonnes, and will encourage further consolidation of the sector's hundreds of steel mills, state media said on Tuesday.

AFP News Via Yahoo
BHP Billiton is expecting a consolidation among Chinese steel mills, with the big getting bigger and the smaller ones perhaps falling away, analysts said following briefings by the diversified mining giant.
UBS resources analyst Glyn Lawcock said BHP indicated in briefings to the analysts at its eastern Australia mine sites that it saw steel production growth coming primarily from China, Russia, India and Brazil.
While China and Russia are most likely to remain self-sufficient to a large degree for coking coal, BHP believes India and Brazil's steel production are likely to be met almost entirely through imported coking coal, he said.
All four countries are also opting for blast furnace operations rather than electric arc furnaces due to the poor availability of scrap and the desire to build large-scale facilities.

I had to laugh at this headline. WMC was one of the terms used by the anti-bush demonstrators, saying that there were no Weapons of Mass Destruction, only the (bush) Weapon of Mass Confusion.

So when I read this headline, it made no sense to me. It isn't April 1st, is it? Turns out, WMC is a company name and unrelated to the political scene ...

And now from the "I didn't know that" department ...
Iranmania.com
LONDON, June 6 (IranMania) - Iran ranked 21st in the world in the production of raw steel in 2004, said Fars News Agency quoting the latest report by the International Iron and Steel Institute (IISI).
The 2005 IISI report put Iran's raw steel production at 7.9 mln tons in 2003, which it said went up by almost 10% to reach 8.7 mln tons in 2004.
In 2003, Iran also ranked 21st in the world steel industry.
China, Japan and the United States were the world's top three steel producing countries, respectively, last year.
Raw steel production reached 272 mln tons in China, 112 mln tons in Japan and 98 mln tons in the US.
Iran is the fifth largest steel importing country in the world after China, the United States, Taiwan and Thailand.
Japan with 33.7 mln tons is the largest steel exporting country in the world, followed by Russia (32.3 mln tons) and Ukraine (26.6 mln tons).

BizJournals
Last month, John Carr met with fellow school construction bosses from Cincinnati, Columbus, Toledo and Cleveland to discuss the worrisome issue of high steel costs.

Carr, chief construction officer with Dayton Public Schools, said the cost increases have caused delays of the school's $627 million rebuild project. He's had to redesign plans to find areas where builders could replace steel with less expensive materials.

And he's not alone. Commercial builders throughout Dayton are altering projects because customers didn't budget for sky-high materials costs. For example, Dana Shoup, president of Vandalia-based Bon Builders Inc., said switching from steel to wood frame on a recent church project in Piqua saved the church nearly 20 percent of the $800,000 price tag.

The price increases also have made builders more cautious in the bidding process.

Prices for steel products used in construction are up roughly 40 percent, industry sources say. The price dipped slightly in April, but area builders say it shot back up in May. Steel is vital in commercial building, used in frames, drywall, doors, ceilings and metal gates.

Steel oversupply hits prices, production sliced
Northwest Indiana News: nwitimes.com
Since peaking in August 2004, steel prices have declined steadily as service centers overbuy and overstock due to market pressure.

From a low averaging near $360 a ton in mid 2003, the average price of cold-rolled sheet more than doubled to more than $800 a ton in late summer on the strength of heavy Chinese and steady domestic demand. But since August, prices have dipped month after month and now rest below $500 a ton.

In an effort to prevent further price erosion, steel producers have cut back production to take capacity out of the marketplace. Both U.S. Steel Corp. and Mittal Steel Co. USA have cut production by banking furnaces and moving up maintenance.

U.S. Steel recently announced its second-quarter flat-rolled shipments are expected to be 7 percent lower than the first quarter, resulting in a drop in annual shipments levels below the 14.5 million tons it had projected.

'They (steel producers) waited too long,' said James Bouchard, chief operating officer of Chicago Heights-based Esmark Inc., which operates seven steel service center companies in the Midwest. 'If they would have done it earlier in the cycle, prices would have stayed up.'

As the automotive industry's demand for steel soured in late 2004, steel companies pushed for orders and service centers obliged, even when inventory levels were beyond the ideal two-and-a-half month level, Bouchard said. Plus sluggish consumer demand has aggravated the situation.

By the time producers cut capacity, the majority of the nation's service centers were sitting on inventory levels so huge that ordering basically stopped.

Steel is a pure commodity and follows the law of supply and demand, he said. When service centers have inventory levels of 2.5 months to 2.7 months, prices go up. When they're above three months, prices go down.

The concern about ever higher prices and the resulting orders, which at times where larger than actually necessary, created a situation where steel production wasn't meeting demand. Delivery times and prices rose through 2004 and by the end of the year steel service centers began to experience inventory overhang and supply began to exceed demand.

"Once the prices begin dropping, people wait to make their next purchases and that exacerbates the situation," Labriola said. "Clearly supply and demand got out of whack.''

The run up in prices occurred within a relatively short time span in comparison to an historic steel cycle, which normally is years long, creating volatility that made it difficult for steel sellers to price their products correctly and earn a return on their capital.

"Prices went up 100 percent, then down 40 percent,'' Labriola said. "That type of volatility adds confusion to the market. You're making decisions based on 90 days in the future. If you're off by 5 percent a month, that's 15 percent."

No one wants to see great volatility, he said.

"Anytime you can eliminate that component it makes for better financial planning, better business planning and better production planning,'' Labriola said. "You want to remove all the variables you can."

He agrees it will be August to September before prices stabilize and he praised steel producers for reducing their output.

"The fact that the integrated mills have decided not to force product in the market healthy for all participants," Labriola said. "That kind of leadership is quite welcome."

Bloomberg.com
Copper futures rose for a third day in London as a shortage worsened, making the metal for immediate delivery 6 percent more expensive than for delivery in three months, the biggest gap in eight years.

Copper for immediate delivery on the London Metal Exchange was offered at $209 a metric ton more than the contract for delivery in three months, a level last seen in July 1997. In a market with adequate supply, prices are higher for later delivery to recover costs including storage and interest.

Two market participants hold most LME-monitored copper stocks as of May 31, according to the exchange's Web site.

The shortage of LME copper will deepen if ``the holder of much of he stocks is about to take delivery and ship the metal to China,'' MacMillan said, referring to a speculation circulating on the LME.

Stockpiles monitored by the Shanghai Futures Exchange, second to the LME in terms of copper futures trade, fell 30 percent from a week ago to 19,848 tons, a 4-week low. China is the world's largest copper consumer.

Labels: Copper

The Orange Leader
The trade publication, American Metal Market, quoted president and CEO Casey as saying that 'it is much more difficult to manage the American worker.'

'They're less loyal to the company,' the trade publication quoted Casey during a speech at the annual dinner of the Pittsburgh Chapter of the Association of Women in the Metal Industries. 'So you have to be able to deal with that compared to countries like Brazil, Japan and South Korea, for example. In those countries, it's a lifelong commitment to a company.

'The old model of fighting management is just diverting energy that should be directed at competing against your competition and competing with imports. A labor contract is not going to protect anything. When 40 percent of the industry went bankrupt, I think all but three of those 35 companies were union. The union has to determine what product they are going to bring to the table.'

AP
Reliance Steel & Aluminum Co. on Wednesday said it is acquiring privately held Chapel Steel Corp., a processor and distributor of carbon and alloy steel plate products.

Reliance did not disclose the financial terms of the deal, which is expected to be final within three months.

Chapel processes steel from five facilities in Pennsylvania, Illinois, Texas, Alabama and Oregon, and also warehouses and distributes products in Ohio and Canada. Last year, Chapel reported revenue of about $273 million from sales to the construction, defense, shipbuilding and other industries.

"Chapel is a well-run and growing company that adds to both our product offerings and our geographic coverage across the country," said Reliance Chief Executive David H. Hannah.

Investor's Business Daily
U.S.-made factory goods increased 0.9% in April, the sharpest gain in five months, the Commerce Department reported Thursday.
Shipments of factory goods increased 0.7%, while inventories rose 0.1%. The inventory-to-shipment ratio fell to 1.24 from 1.25 in March.

AP via Yahoo
NEW YORK (AP) -- U.S. manufacturing expanded at a slower-than-expected rate in May, constrained by high energy prices and fat inventories, especially in the automobile sector, figures from a private research organization showed on Wednesday. Stock prices rose on speculation that the weak performance could give the Federal Reserve second thoughts about more interest rate hikes.

While manufacturing activity expanded in May for the 24th consecutive month, the rate has slowed in each of the last six months, and May's reading was the lowest since June 2003, according to the Institute for Supply Management.

Stelco press release
Stelco Inc. announced today that, while it continues to expect solid performance in the second quarter of 2005 from a historical perspective, operating earnings in the quarter are now expected to be considerably below the level of the first quarter of 2005 largely due to lower spot market prices as well as higher energy costs and the flow through of higher cost inventory produced in the first quarter.

Labels: stelco