Look for lower prices . . . with one glowing exception

Jan 01, 2009 | 11:35 AM |

The hand-in-hand relationship of the steel industry and consumables sector that supplies it has analysts upbeat that there are better times on the horizon. The question, though, is how far away is the horizon.

Equities analysts covering the North American steel industry believe most costs related to consumables travel hand-in-hand with steel production levels. And with steel production levels falling, demand for consumables is shrinking in lock-step.

"The need for graphite electrodes and other consumables is for the most part directly proportional to (steel) production levels," said Mark Parr, a steel industry analyst at KeyBanc Capital Markets Inc., Cleveland. "If production goes down, your need for consumables goes down. It's like if your wife goes away for the weekend and you leave the dishes in the dishwasher. If you don't run the washer, you don't use detergent."

But not all things run in parallel, making the cost of consumables—like fluxing materials, graphite electrodes and refractory furnace linings—a little more difficult to track at times.....





Latest Pricing Trends

Poll

Is severe weather affecting your business?

Yes
No


View previous results