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What recession? Steel's poised for profits despite poor demand.

Publication: Metal Center News
Publication Date: 01-APR-08 		Format: Online
Delivery: Immediate Online Access
Full Article Title: What recession? Steel's poised for profits despite poor demand.(BUSINESS TOPICS)

Article Excerpt
WITH STEEL DEMAND WEAKENING along with the U.S economy, how can steel prices be so high?

Steven Randall, managing director of The Steel Index for London-based Steel Business Briefing, explained this contradiction during SBB's annual conference in Chicago last month.

Steel prices increased by more than 40 percent in the past seven months, topping $800 per metric ton and eclipsing the previous record set in 2004. In fact, steel prices are similarly strong in markets all over the globe, which is contributing to the dearth of imports in North America.

"Prior to 2004, it typically took two to three years for steel prices to move 40 percent. Now we are seeing 60 percent swings in less than a year. There's been a step change in price levels and a step change in volatility," Randall said.

With industry EBITDA in the 15 to 20 percent range, he added, "2008 will be one of the strongest years the steel industry will see in its history."

While many expected steel industry consolidation to bring greater price stability, that's obviously not...

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