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Former steel financier bullish on shale

Mar 21, 2014 | 04:10 PM | Thorsten Schier

Tags  Wilbur Ross, ArcelorMittal, shale, Capital Link, International Steel Group, Thorsten Schier


NEW YORK — Former steel financier and ArcelorMittal SA director Wilbur Ross is banking on the shale gas revolution to drive a North American manufacturing renaissance.

“I’m a big believer in shale gas and it’s cousin, tight oil,” the chairman and chief executive officer of New York-based investment firm Wilbur Ross & Co. LLC said at Capital Link Inc.’s eighth annual Shipping Forum in New York.

While domestic energy costs have fallen due to cheap natural gas, prompting Linz, Austria-based Voestalpine AG to build a 2-million-tonne-per-year hot-briquetted iron facility in Texas (amm.com, March 13, 2013), wages in China are rising, making manufacturing there less competitive, according to Ross.

However, Ross expressed concern about federal regulations crimping the growth of the shale industry. “My worry is that instead of getting out of the way, (the federal government is) getting in the way,” he said.

In general, a state of uncertainty about federal regulations, both environmental and in such areas as health care, are holding back company spending, he said.

“It’s no wonder that American companies are holding on to their cash until they understand what the ground rules are,” Ross said, also urging the speedy approval of more projects for exporting liquefied natural gas to countries that don’t have a free-trade deals with the United States.

“Those alone would be $100 billion worth of capital investments,” he said, adding that some of the proposed projects are “not only shovel-ready, but shovel-hungry.”

Ross sold International Steel Group Inc., a collection of bankrupt North American steel producers like LTV Corp. and Bethlehem Steel Corp., to Mittal Steel Co. NV in 2005 for $4.5 billion (amm.com, April 18, 2005).




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After witnessing the pace of steel plant idlings and worker layoffs during the first half of the year, what is your view of the second half of 2015? (choose one)

No matter what else happens, layoffs and shutdowns, etc., have nearly or essentially stopped for the year.
The environment will change little and the pace of layoffs will continue at a similar rate as the first half of 2015.
The environment will change little yet the pace of layoffs will begin to slow slightly to moderately.
The environment will change little yet the pace of layoffs could exceed the rate seen thus far.
The environment will improve slightly to moderately yet hiring and plant restarts will not resume this year.
The environment will improve slightly to moderately, with hiring and plant restarts commencing.
The environment will improve dramatically yet hiring and plant restarts will still be negligible in comparison.
The environment will improve dramatically yet hiring and plant restarts will only be slight to moderate.
The environment will improve dramatically, with hiring and plant restarts occurring nearly in tandem.


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