According to an article in Recycling Today, the World Steel Association is forecasting growth in the global steel industry of 9.2 percent, resulting in production of 1.206 billion tons of steel. In the US, they are forecasting a growth rate of 18.8 percent. From a US steel distributor’s perspective, that seems like quite a leap.

All across the US, demand appears to be weakening as construction and manufacturing contract in the face of the annual winter slowdown. Across the northwestern US, many fabrication shops are only seeing a 2-3 month backlog of orders, with very little coming on the horizon.  So if the forecasts are even close, the second half of 2010 would need to be pretty good. I guess we’ll see what happens but as positive a person as I am, it seems like quite a stretch to me.

I hope that somehow the forecasts come close. Not only will it affect our steel revenue but probably even more, our scrap revenue. As steel demand heats up, so will scrap demand, which is still experiencing a shortage here in the US. That shortage will likely cause price increases, which bodes well for scrappers as long as we don’t experience a fall-off similar to last year. Either way, I think we are in for an interesting ride.

So, do you see something different than me? Any positive news you have heard that would have long-term consequences?

There is a lot of talk about how the US economy will emerge from recession. One thing is sure, the manufacturing sector in the US is still sluggish. The question is, will it continue to crawl along, fall back into recession or bounce out quickly? According to an article in Recycling Today, over a third of manufacturers and steel service centers surveyed believe we will see a fall back before we see full recovery. So, what are your thoughts?

So, will trading in steel scrap futures really present long-term protection from price fluctuation risk? Haven’t the recent large swings in oil prices been tied at least partially to the trading of oil futures? Call me naive or whatever you want  – from my vantage point, it seems like just another opportunity for a few to get rich at the peril of many others, including adding additional risk to our economy. What are your thoughts on this?

I neither approve nor disapprove of the appointment of David Hayes for a position in the Interior Department, however, I do disapprove of this. It seems so juvenile to block an appointment simply as retribution for some other action that was taken. Now, if the Republicans said they were blocking the appointment based on Mr. Hayes’ past record, I could respect that. This “playground” behavior (which has been played pretty equally by both sides) is what has so many of us sick and tired of politicians in general.

While this news isn’t very heartening, let’s try to look on the bright side. At least when the automakers go to purchase steel to make cars, the steel will be at a greatly reduced rate so they should be able to cut their losses to the point they may actually make money. And, according to our good President Obama, this would bode well for the US population because if GM and Chrysler can be turned around and make money, our investment of however many billions of dollars will pay off and we’ll all get additional tax breaks. So, there you have the silver lining to the dark cloud of the depressed steel market outlook. It’s ok, no need for a standing ovation, just send me money so I can buy one of those new cars.