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It’s not news, I suppose, to point out that energy is a contentious and controversial subject in America these days. After all, when is it not?
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It is understandable that players in the scrap sector have approached CME Group Inc.’s new ferrous scrap futures contracts with a certain level of skepticism.
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I’m going to say something that will probably sound heretical to many in the metals sector: When it is functional, government provides certainty in an otherwise uncertain environment.
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What a difference a year makes. At AMM’s fifth annual Steel Scrap Conference in Chicago in November last year, much of the talk was about the remarkable run of stability the market had seen during 2011 up until then.
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Technology is vital to all metal sectors, but it’s not just breakthroughs in production and processes that are important to the bottom line. Information technology has become just as significant, and an array of hardware, software, systems analysis mechanisms and data-analysis tools are available to help metal companies make better decisions.
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With the fourth quarter fast approaching and the presidential election looming ever closer, the view of where metal markets are heading seems no clearer than it was six months or even a year ago.
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When William Faulkner wrote that “The past is never dead. It’s not even past,” chances are he wasn’t thinking about the steel industry. But nevertheless, the idea applies quite well. Without an awareness of metals history and at least living partially under the shadow that it casts, forward progress would not be possible.
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At AMM, we’re going to be full of stars in the coming weeks as we induct the newest members of our Steel Hall of Fame and present awards for excellence to industry leaders in aluminum and steel. In this issue, we profile the latest Steel Hall of Fame inductees, as well as the finalists for our aluminum and steel awards.
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This month’s issue offers a story on controlling risk in the aluminum sector. The use of information technology (IT) for budgeting, forecasting and other financial-related aspects of running a metals business are an important part of that approach. Aluminum firms are to be commended for their foresight here.
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Other than the cowboy, there may not be a symbol that more powerfully evokes the American ideals of autonomy and individualism than the automobile. Those icons came together at halftime during the Super Bowl, when Chrysler aired an ad featuring Clint Eastwood. Before delving further into the ad, its fallout and what it says about the short-term fortunes of the automotive metals sector, some context is needed.
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Sometimes, the greatest heat in steelmaking doesn’t come from the plant floor. Pressures to perform in competition with other companies and for the corporate bottom line can raise the temperatures in which executives must work every day.
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Making steel may be all in a day’s work for millions of people around the world, but sometimes during the course of that effort a few individuals make history and long-lasting breakthroughs.
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U, V and W: They’re not just the 21st, 22nd and 23rd letters of the alphabet. They also represent three competing theories on the current downturn and where the economy might be heading in 2012.
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In modern America at least, economic recovery requires bipartisanship; better yet would be nonpartisanship. Paradoxically, this becomes truer in clearly divided political times such as today.
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With the first three quarters of 2011 in the books, prices for scrap today are at their highest levels in history when measured against annual averages.
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When it comes to backing the notion of government intervention in the marketplace, business leaders in the metals industry have just three words for Washington: infrastructure, infrastructure, infrastructure.
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Of all the contemporary rivalries involving the environment—paper vs. plastic, oil vs. coal, wind vs. solar—steel vs. aluminum might end up among the most important. It certainly is emerging as one of the most hard fought in the court of public and industry opinion.
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This is an exciting time at AMM. We’re just weeks away from announcing the winners in the second Awards for Steel Excellence program.
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It’s good to be king, they say. But short of that, it’s not too bad being in the aluminum business right now.
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The past decade has been an interesting one for the scrap industry, to say the least. Demand has blossomed, prices have soared and profit margins for the most part have been good.
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Forget the three Rs. Let’s talk about the three Es: energy, ecology and economy. All three are serious issues facing America and its citizens and businesses, and each is something the metals industry needs to take to heart in a frank way.
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It’s a seasonal ritual at my house, one that goes something like this About mid-December, dive into the bedroom closet, retrieve a box or two of Christmas bulbs, a tangle of lights and a beat-up tree stand. Then head to the living room, anchor the tree in the stand, breathe deep and steel yourself for the ultimate test ... stringing 10 feet of model-train track together in as perfect and level an ellipse as possible around the base of the newly decorated tree.
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If American business—and the metals sector especially—presented a Word of the Year award, 2010’s winner would be an easy and probably unanimous choice uncertainty.
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If American business—and the metals sector especially—presented a Word of the Year award, 2010’s winner would be an easy and probably unanimous choice uncertainty.
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It takes 14 hours to fly non-stop from New York’s JFK International Airport to Japan’s Narita Airport outside Tokyo—time enough to knock off two movies, a crime novel and three in-flight meals served complete with hot towels and green tea.
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From Wall Street to Everett, Wash.—where they’re putting together the Boeing 787 Dreamliner—to the big aircraft forging shops around Los Angeles and Boston, as well as the Tier 1 subcontractors of the industrial heartland, anyone who makes, sells or works with titanium is wondering “What kind of market cycle are we in for?”
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In the cut and thrust of the modern steel industry, it’s all too easy to forget to recognize the achievements of individuals and enterprises that have helped drive the industry forward.
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Somewhere in the region of 1,000 leaders from all aspects of the steel industry will convene in New York this month for what has become an annual summit of the sector’s movers and shakers.
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According to Rio Tinto Alcan’s chief executive, aluminum is not yet out of the woods and it may take quite a while, perhaps even a couple of years, until inventories return to healthy levels.
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It’s a basic rule of investing that you should distinguish between risk, which is largely measurable, and uncertainty, which isn’t. Embrace the former and, unless you have nerves of steel and deep pockets, be very wary of the latter.
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When Leo Gerard starts praising Ronald Reagan, you know the world is changing.
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One of the highlights at AMM’s State of Steel Conference in January was the on-stage interview with Keith Busse. Steel Dynamics Inc.’s president and chief executive officer put on an assured display, leading one industry veteran to comment that he was “pretty good for an accountant.”
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After a year in office, the Obama administration seems to have managed to split the country on most issues. Approval ratings of 50 percent as of mid-January indicate widespread disagreement on many of the President’s policies, from health care reform to climate change to financial regulation. Add issues like “card check” and “Buy American,” and it’s a good bet that there’s a big difference of opinion in the metals industry, too.
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Question: if you’d cleared space in your garage on Jan. 1, 2009, for a ton of No. 1 heavy melt scrap, a couple of hundred pounds of copper and an ounce of gold, which would have proved the smartest investment a year on?
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Question: if you’d cleared space in your garage on Jan. 1, 2009, for a ton of No. 1 heavy melt scrap, a couple of hundred pounds of copper and an ounce of gold, which would have proved the smartest investment a year on?
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Chances are that when the federal government’s “Cash for Clunkers” incentive program was implemented in the summer, questions of its impact on the scrap industry was pretty low on the administration’s list of priorities.
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Too little, too slow. But not necessarily too late. That seems to sum up steel’s verdict on the impact of the American Recovery and Reinvestment Act (ARRA), better known as the economic stimulus package.
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Followers of Nostradamus credit him with predicting all kinds of events—from the rise of Napoleon to World War II. But if the medieval seer had been tasked with forecasting the near-term future of the aluminum industry, he might have been left scratching his head.
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In the months since the economy collapsed, it’s become something of a bittersweet parlor game to try to pinpoint exactly when the overwhelming confidence of the financial boom tipped over into something closer to hubris.
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At least once a year, and always in step with the Institute of Scrap Recycling Industries’ annual convention and exposition, AMM takes a close look at the financial ups and downs, major themes, high-profile players, companies and events that have made their mark—good or bad—on the ferrous and nonferrous scrap industries over the preceding 12 months.
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Was it a mistake? As the global commodity boom disintegrated over the past eight months and the wisdom of decisions made when the going was good has increasingly been called into question, that is something many industry executives have been asking themselves. Some strategic moves made at the height of the bubble, such as Rio Tinto’s $38.1-billion acquisition of Alcan, have been proved to be all-but-disastrous for the buyer; others, notably BHP Billiton’s aborted bid for Rio, nearly so.
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It’s a critical transportation industry. It’s been hit hard by the financial crisis. And metals suppliers who had been banking on a continued expansion are now facing a very different situation.
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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.
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For a concept whose roots date back to the early 1930s and the last time this country found itself in as deep an economic funk as it is today, the “Buy America” provision in President Obama’s stimulus package has roared back onto the American industrial/manufacturing scene with lightning-rod quickness and controversy
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Have we hit bottom? In the weeks leading up to the Christmas holidays, that was the question on the lips of many in the North American industry. That it was even being asked could be viewed as a sign of progress from September through mid-November, the market direction was unequivocally down.
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It’s been described, aptly, as the inbox from hell. As Barack Obama puts together his transition team in the weeks before his inauguration on Jan. 20, the President-elect could be forgiven if depression—with a small “d”—sets in.
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When a bubble bursts, it doesn’t take long for the gas to escape.
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Flying is not as much fun as it used to be. From the ever-decreasing size of airlines’ complimentary packets of peanuts to the introduction of eye-popping fuel surcharges, much of the sense of excitement and adventure seems to have gone from the whole experience.
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It was only a few months ago that Donald R. Lindsay, chief executive officer of Teck Cominco Ltd., was lamenting the lack of opportunities in one segment of the steelmaking raw materials market. Teck would love to get into the iron ore business, he said in February, but the problem was there were no good properties available.
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No less a figure than Lakshmi N. Mittal sounded a warning note in his otherwise upbeat speech at AMM’s Steel Success Strategies XXIII conference in June. Surging input costs are “unsustainable,” he said, and risk hurting the steel industry’s customers.
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As viewers of HBO’s mini-series Rome will know, emperors from Julius Caesar onwards sought to resist delusions of grandeur by employing a slave to whisper in their ear, “Remember you are mortal.” Amid the pomp and circumstance of what many people now acknowledge to be the most sustainable period of growth in the steel market for a generation, a similar warning would be advisable.
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If the boom in commodity prices has been a home run for most metal producers, it’s fair to say aluminum is stuck kicking dust on second base.
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While we like to think that much of the news reported in AMM makes readers sit up and take notice, only occasionally does a news story send shockwaves through the industry.
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When mini-mills such as Nucor Corp. and later Steel Dynamics Inc. (SDI) established the viability of electric-arc furnace steelmaking in the U.S., they overturned a few sacred cows in the process. Traditional producers had to change their game, while the knock-on impact of their strategy helped refashion the way steel was produced.
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This year’s race for the White House could be closer than any election in recent memory. As the remaining candidates geared up for Super Tuesday in early February, it was still anyone’s guess as to who would win the eventual nominations for November’s presidential election.
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It’s tempting to characterize 2007 as the year of consolidation in the metals industry. But if there’s a good reason not to, it’s because there’s every chance that what we’ve seen during the past year will pale in comparison to what might take place in 2008. As long as the China-fueled commodities boom lasts, there will be demand for natural resources—and producers, profiting from high prices, will have money to spend on acquiring competitors, suppliers or customers.
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A battle has been building in the service center industry for a few years now. The major protagonists, of course, are Reliance Steel & Aluminum Co. and Ryerson Inc., the two largest players—by some distance—in the sector.