Shattered ceiling.If, as has been reported, Federal Reserve Bank Chairman Alan Greenspan Alan Greenspan Dr. Greenspan is Chairman of the Board of Governors of the Federal Reserve System. Dr. Greenspan also serves as Chairman of the Federal Open Market Committee (FOMC), the Fed's principal monetary policymaking body. looks at ferrous scrap pricing as a leading economic indicator leading economic indicator An economic or a financial variable that tends to move ahead of and in the same direction as general economic activity. Compare lagging economic indicator. See also index of leading economic indicators. , he must be in full inflation-fighting mode. Ferrous scrap pricing ended 2003 making an extraordinary leap into per-ton pricing levels seldom reached in the market. Orders for ferrous scrap continue to come in from Asia, while domestic steel mill capacity rates at the end of 2003 were reasonably healthy (79 percent) by December standards. The competition for ferrous scrap has reportedly brought steel producers and consumers together to ask the U.S. government to consider ferrous scrap export controls. After two years of animosity between steelmakers and their customers over protecting the North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. steel market, the groups seem to have found common ground over high scrap prices. The mill companies and their customers may be laying the groundwork for controls on scrap flow and pricing. In comments made to American Metal Market in early January, a vice president with the Forging Industry Association (FIA FIA feline infectious anemia. ), Cleveland, remarked, "Steel scrap is disappearing at an increasing rate and causing a shortage in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. and in turn is increasing the cost of steel. Where does it end?" Apparently, manufacturers hope it will end the way it did in the early 1970s, when export controls were established to stop the migration of scrap to Japanese and South Korean mills. In an industry outlook paper released in December 2003, the SMA (1) See SMA connector. (2) (Shared Memory Architecture) See shared video memory. (3) (Software Maintenance Association) A membership organization that began in 1985 and ended in 1996. cited "comparative tax burdens, employee benefits, litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. , regulatory compliance and energy policy," as domestically imposed costs that are burdensome to U.S. manufacturers. Raw material costs were not mentioned. In fact the SMA statement refers to "the unresolved policy issue relating to government subsidies in the world steel industry. We oppose them--period--whether for U.S. steel companies ... or foreign steel companies." No. 1 Heavy Melt Composite Pricing Dec02 $97.00 Jan03 $106.41 Feb $115.91 Mar $120.42 April $119.80 May $109.04 June $106.13 July $111.21 Aug $123.32 Sept $128.35 Oct $130.67 Nov $144.03 Dec $159.88 Source: American Metal Market (per gross ton, monthly average) Note: Table made from bar graph. |
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