METALLICS Steel is set for a rebound and scrap will feel the bounce

Sep 01, 2007 | 10:55 AM |

Steelmakers can expect to see a rebound in demand for flat-rolled products by the fourth quarter, but with that recovery they also can expect to be paying more for ferrous scrap, according to two industry analysts.

"We expect some uptick in the fourth quarter. Our projection of steel production is higher and demand is going to increase and drive scrap prices up a bit," said Sal Tharani, steel analyst at Goldman Sachs & Co., New York.

Demand for long products, like beams and bars, has been good for much of 2007, he said, noting that the weakness generally has been in the flat-rolled markets.

"We are very optimistic on steel in the fourth quarter. We are seeing the pickup in automotive. It shut down in July and August. It is going to come back when it starts with the new model buildup," he said. "Appliances may not improve much because housing is still weak."....

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