Steel Industry meets as prices fall

Source NWTimes.com

The exhilaration that permeated the steel industry at the 2004 Steel Success Strategies conference will be tempered during this week's event by low steel demand, high inventories and falling stock prices.
In the last 12 months, the cyclical steel industry reached record high prices and profits, then abruptly reversed its course and currently continues its slide.
The price of hot-rolled steel recently dipped to under $500 per ton from 2004 autumn highs of more than $800, because service-center inventory levels have exceeded buyers' appetites due to lagging auto sales and lower demand for consumer goods.
So, as world steelmakers meet in New York City Monday, their industry again is on the bubble, and steelmakers are cautiously waiting to learn if the domestic industry's consolidation gives it the flexibility to withstand a wavering market.
The local integrated industry's steel output dropped to 416,000 tons for the week ending June 4, from 521,000 tons the final week of 2004.
During the past several months, mills began voluntarily reducing capacity by shuttering furnaces and accelerating maintenance rather than pushing unwanted quantities of steel on the spot market and depressing prices even further.
Jointly sponsored by the steel consulting firm of World Steel Dynamics Inc., and the industry's daily trade publication, "American Metal Markets," the 20th annual Steel Success Strategies conference being held Monday through Wednesday is slated to focus on two factors: "China: threat or not?" and "Is it the end of shortage?"
The conference's keynote presentation, "Can Global Steel Maintain the Psychological High When China Falters?" will be given by World Steel Dynamics managing partners Peter Marcus and Karlis Kirsis, who predict that pricing "death spirals" for steel sheet products on the world steel export market are sure to recur in the future.
Lakshmi N. Mittal, chairman and chief executive officer of Mittal Steel Co., the parent of Mittal Steel USA, is scheduled to be a luncheon speaker. His son, Aditya Mittal, the company's president and chief financial officer, was slated to be on a member of a panel discussing, "Global Steel: Fewer Players and Tight Metallics: What's the Consequence?" but is no longer able to attend, according to a company spokeswoman.
"The mood of this year's conference participants may not be as enthusiastic as it was in 2004, because business isn't terribly good at the moment," said analyst Charles Bradford, president of New York-based Bradford Research.
"But it still will be one of the best years in history," he said.
"The integrated companies' costs have gone up, but the minimills' costs have come down."