Global Steel Trade Press Gets it Wrong on US Market

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Ferrous Metals, Global Trade

A recent article in Steel Guru caught my attention because of some points it takes from a recent Tex Report (a Japanese origin English language website reporting on various commodities). In short, the article suggests US customers have faced and will face problems obtaining material due to several fires that have occurred in recent months. The fires occurred in the US – one furnace at Sparrows Point in which a fire broke out in September, AK Steel’s No 3 blast furnace at its Middletown works and Essar Steel Algoma Inc is “reported to have shut down one of two blast furnaces in the wake of a September 24 accident. The article goes on to say, “¦.various production problems this time with major integrated steelmakers have begun to have a serious influence on various customers, (ed. Note: Steel Guru’s writing, not ours)

We contacted John Packard who runs the site Steel Market Update to get his comments and insight on the fires. He told MetalMiner, “The AK Steel fire ended up being a non-event.   The fire was outside the furnace caused by a spill. In terms of the other fires, John said, “The Sparrows Point furnace never shut down.   I actually spoke to someone at the plant when the fire was just put out.   The furnace never missed a beat. The AK furnace may have missed one turn but that is about it and means nothing since AK has more melt capacity than they have orders to fill. John went on to suggest that the comment about Japanese mills needing to ship emergency material to the US may relate to late orders out of USS and Mittal to the automotive industry but not to the fires.

The next comment from the Steel Guru/Tex Report article also raises some eyebrows, “In the USA, domestic demand for steel product is arising in relation to housing construction. First, housing construction though having bottomed out has hardly increased enough to impact steel demand. Second, housing demand has a much smaller impact on the overall steel market as commercial construction really drives the market.

Finally, the article makes the following statement, “besides, the steel industry is on track to a recovery in its basic direction as President Barack Obama’s economic measures show results, to which the words Ëœwishful thinking’ come to mind. In fact, only about 10% of the stimulus dollars for “shovel ready projects have actually left Treasury coffers (the balance will come in 2010) but we recently reported on an ISM survey question that concluded 73% of ISM survey respondents (all manufacturers) did not believe the stimulus dollars would directly affect them.

John Packard of Steel Market Update came to similar conclusions. You can read his blog post on the same story for second take.

–Lisa Reisman

Comment (1)

  1. Lauren says:

    Your headline is deceiving – the “global steel trade press” isn’t getting it wrong…just Steel Guru. By now people in the industry should know better than to trust that publication.

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