METALLICS In a resource-short world, commodities are uncontested king

Sep 01, 2007 | 10:50 AM |

We live in a world with a finite amount of resources, the supply of which is growing shorter day by day. Combine that with explosive economic and manufacturing growth in various countries around the globe, and what do we get? Apparently, just the right mix.

Ferrous scrap is only one of the commodities that is in tight supply in a resource-short world, one prominent U.S. scrap industry executive says. "I don't care if you are talking about oil, or agricultural commodities, or metallics," said Daniel W. Dienst, chairman, president and chief executive officer of Metal Management Inc., Chicago. "The consensus is we are in a resource-short world. With the explosive growth outside of the United States and still fairly mild growth characteristics inside the United States, it really sets up what we believe is a favorable long-term demand-supply situation for all commodities and, in particular, metallics."

The U.S. manufacturing economy is in a sloppy, strange period at the moment, Dienst said. However, many of his company's industrial accounts are still running pretty strong. "The steel mill and scrap guys are finding their way through this market. (There is) no shame in $300 bundles and busheling and $250 to $270 shred," he said, but added that if steel demand recovers and economic growth accelerates in the United States in the second half and into next year it could be a time to "look out."....