RG’s ‘short life’ due to volatility: Nelson
Oct 10, 2012 | 03:49 PM
| Michael Cowden
Tags
RG Steel,
Jerry Nelson,
bankruptcy,
steel prices,
raw material prices,
volatility,
Sparrows Point,
Warren
Mingo Junction
ROSEMONT, Ill. — Price volatility played a major role in RG Steel LLC’s collapse, but so did other forms of turbulence, including ownership turnover, according to one former company executive.
The company’s operations in Sparrows Point, Md., in particular, were hit hard by a combination of falling finished steel prices and stubbornly high spot tags for coking coal and iron ore, largely as a result of flooding in Australia and demand from China, Jerry Nelson, the company’s former general manager of commercial, said this week at Steel Market Update’s third annual Steel Summit conference in Rosemont, Ill.
High hot band prices initially justified decisions to restart the blast furnace at Sparrows Point despite high raw material costs, Nelson said. And a series of "rapid-fire" price increases in late 2011 and early 2012, in theory, should have seen coil prices move to $780 per ton if they had been fully realized, he said.....
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