The pendulum swings millward with a vengeance
Dec 01, 2008 | 05:16 AM
Watching the mid-October stock market collapse, rise, then collapse again was not a pleasant experience. Television news showed the anguish of traders on the floor of the New York Stock Exchange as even blue-chip stocks like PepsiCo Inc. fell to new lows.
They had it easy; they could go home when the market closed at 400 p.m. The shock and awe they suffered was mild compared with the migraines that many of the nation's ferrous scrap dealers endured.
Ferrous scrap prices didn't simply plunge in mid-October. They fell into an abyss.
With steel product sales sagging, inventories piling up and mill operating rates falling, none of the mills was buying even a pound more than they needed to meet their production requirements. Many steel mills didn't want scrap—some didn't even want the scrap they already had ordered—while those who were buying took far less than the usual tonnage purchased for each month's melt program.
One respected industry analyst estimated that mills were producing at only about 77 percent of their capacity in early October, although capacity utilization rates calculated by the American Iron and Steel Institute were still showing domestic mills' operating rates in the 80s.....
To access AMM's full content, please log in below. If you do not have an AMM account, we invite you to take a free trial or subscribe below.
Already a registered amm.com user?
Access to amm.com editorial content is granted only to paid subscribers and trialists. If you do not have an active account in your own name, please either subscribe or take a trial and you will have instant access to amm.com content. Sharing your login credentials with individuals who are not subscribers represents a violation of AMM copyright.
Every morning, every minute no matter how often you follow the markets, there's an AMM subscription to fit your needs.
Not sure if you are ready to invest in a subscription right now? Take a free, no-obligation trial. Start your free trial today.