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Article Excerpt
THOUGH THE U.S. ECONOMY may be weakening, there's no reason 2008 can't be another strong year for steel shipments and profits, Nucor Steel's Dan DiMicco told service center executives at MSCI's tubular conference last month.
DiMicco's concern for the steel market is more long term, he explained, as mercantilist trade policies by the Chinese and other governments continue to erode U.S. manufacturing.
Indeed, DiMicco was critical of Congress and trade officials for not taking a harder stance against the Chinese government's currency manipulation and industry subsidies, which give China's exports an unfair advantage on the world market in clear violation of World Trade Organization rules, DiMicco said.
Even though steel demand is down somewhat--and could slide further if the economy dips into recession--inventories are relatively lean and imports have declined significantly in the past seven months. Unlike in the late 1990s when demand was sky-high but supplies were even higher, which drove steel prices down to unprofitable levels, supply and demand are fairly even today and the outlook for pricing is good, he said.
"If you take a look at the steel market around the world today, it is a very busy, very energized market. Even though demand is down and may soften more during the year, it is still in balance with supply. In...
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