China's steel appetite hurting U.S. industry.

In a June 27, 2003 commentary, The Economist magazine of England noted: "China's steel producers are developing so fast that the country is likely soon to overtake Japan as the world's largest importer of iron ore, a crucial ingredient in the production of steel. Before long, China could turn itself from being a big importer into a net exporter of steel. In recent years, the country's steel-makers have invested heavily in new factories and in modernising existing ones. That investment is beginning to pay off. A decade ago, Asia as a whole accounted for about a third of the world's production and consumption of steel. Today, the figure is closer to half on both counts, with China alone accounting for a quarter of the world's output and demand."

China is expected to consume 300 million tons of steel this year, and produces three times more than the U.S. Most of the large U.S. steel mills are gone, victims of U.S. trade and regulatory policies. Now the mini-mills which produce smaller quantities of high-grade specialty steel are feeling Communist China's bite. Over the past year, China has drastically stepped up purchases of scrap steel, driving the cost of scrap used by the mini-mills to unprecedented heights. Scrap steel prices soared from $77 a ton in 2001 to $300 in February of this year. Many U.S. factories have been unable to obtain steel for manufacturing and building contractors are finding it difficult to enter into contracts with the volatility of steel prices injecting massive uncertainty into cost calculations.