Wary Steelmakers Give Legs to Metal's Rally as Buyers Reel

[mahatmakanejeeves]

Full disclosure: I have a stake in this, as I own some steelmaker stock. None of the companies I saw in the article, though.

Wary Steelmakers Give Legs to Metal’s Rally as Buyers Reel

Joe Deaux
Mon, August 2, 2021, 4:36 PM

(Bloomberg) -- The record rally in steel has further to run as U.S. producers vow not to get burned again by ramping up too fast.

Prices for hot-rolled coil futures in the U.S. have surged more than 80% in 2021, the best start to a year in records going back to 2009 and eclipsing gains in other all major commodities. Prices touched an all-time high last week. Despite customer pleas for more metal, steelmakers that paid steep costs to shut down furnaces in the pandemic have yet to announce new plans to build out capacity, focusing instead on generating record profits for shareholders.

The surge in steel, used in everything from cars to washing machines to toasters, is adding to concerns that rising costs could imperil a fragile economic recovery as manufacturers struggle with materials shortfalls and inflation gauges jump. Last month, tractor-maker AGCO Corp. said farmers are slowing purchases amid soaring steel prices, while Siemens Gamesa Renewable Energy SA’s profit warning rippled though shares of Europe’s biggest wind-turbine producers.

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[doc03]

1. I worked in the steel industry for 40 years. It was either

feast or famine. We would lose money for several years then one or two we would make huge profits. But each famine got worse and each feast got smaller.