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In a pickle

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Toll processing has never been the most glamorous part of the metals industry. Processors don't make steel; they don't buy steel; they don't own steel. But it's a critical part of the North American metal supply chain, and right now it's suffering badly.

As AMM's Chicago-based correspondent, Corinna Petry, discovers in this month's cover feature (page 28), the sector is in a uniquely vulnerable position stuck between the catastrophic decline in the sectors that make up their traditional customer base—auto, construction and appliances—and cutbacks at steel producers. As one executive notes, "If people aren't buying value-added services for flat-rolled steel, what is a pickler going to pickle?"

Processors are tough, business-minded and prepared to weather the storm. Beyond that, their destiny is out of their hands. The health of the auto industry, the success of efforts to free up consumer credit and the future of the ailing economy will determine the outlook for 2009 and beyond. All of which helps make up a challenging "to do" list for Barack Obama, whose first few weeks in office have been among the toughest faced by a new President in living memory. To provide a break from the issues of state—and a reminder of the historic moment that we all witnessed Jan. 20—AMM's Washington correspondent, Diana Schwaeble, asks some of the capital's lawyers, lobbyists and steel trade executives where they were on inauguration day (page 45). Some slept at the office so as not to miss a moment, some fled the security and others took it all firmly in stride.

For those in the northern and eastern parts of the country at least, it's been a tough winter. But never say AMM doesn't take you to sunnier climes. On page 48, we take a look at how the steel market in Mexico is dealing with the economic woes, and find that although the sun may shine more often south of the border, many of the problems are the same. And on page 32, take a trip to Cuba—legally—to tour the world's second-largest nickel reserves. Now that Fidel Castro has ceded power to his brother, and with a new administration in the White House, what are the prospects for U.S. mining companies wanting a slice of the action?

Finally, AMM tackles head-on one of the biggest issues in the sector today jobs. A year ago, industry executives were bemoaning the difficulty of attracting qualified new staff to the metals sector; now, thousands of jobs are being lost as companies cut operations. Is recruitment still an issue? Turn to page 40 to find out.

That's it for this month. Buckle down and let's hope spring arrives before too long.

KEVIN FOSTER

Managing editor


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