[Vision2020] Rising Steel Prices

Sat, 21 Feb 2004 10:35:19 -0800

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Dick,

While I'm not a big fan of our involvement in Iraq, blaming the increase
in steel prices seems a bit strange. I follow a number of commodity
prices because of my involvement in the paper industry. In January, we
were already seeing cancellation of steel deliveries at several major
projects in North America. My understanding is that it has been to
increased demand in countries other than Iraq (primarily China, but also
Mexico, Japan, South Korea). I will be happy to post some URLs if you
would like.

But higher demand is only one reason for the increased prices. Other
changes that have occurred include:

-          Changing currency rates
-          Coke shortages
-          Increased energy costs (electricity, natural gas, etc.)

The prices of OSB and lumber have been pretty volatile since the fires
in BC this summer. The led to a much lower inventory and combine this
with the tariff dispute, a lot of BC sawmills cut their production. With
the increase in housing starts, this had led to a continual price climb
since July. It takes a while for this to reach some consumers (depending
upon contractual arrangements). I must admit that the EXTREMELY high
volatility of the OSB prices perplex me. But I doubt this has to do with
our involvement in Iraq.

Bill Strand

-----Original Message-----
From: vision2020-admin@moscow.com [mailto:vision2020-admin@moscow.com]
On Behalf Of Dick Schmidt
Sent: Saturday, February 21, 2004 9:13 AM
To: vision2020@moscow.com
Subject: [Vision2020] Rising Steel Prices

All,

I want to clue you in on what has been developing in the steel industry.
I have been involved in this industry since 1963 and we are seeing the
largest price increases and shortages I have ever witnessed.

In December they were talking about $30.00 a ton increase on products I
am now selling, painted light gauge coil for the building industry, for
$1,375.00 a ton. Yesterday I heard that in the Midwest and east coast
they are now talking $450.00 a ton price increase. Re-bar (deformed
reinforcing rod) has gone up 300% in some cases. Some nail prices have
risen very fast with 16d (2-1/2") Common and 8d (1-1/2") Common almost
unavailable. Because the price of scrap metal is at an all time high, in
Detroit thieves had been stealing manhole covers and selling them to
scrap yards for $7 each until a law was quickly enacted to fine any
scrap yard found with manhole covers $10,000. We are going to be seeing
the results of this in the near future in higher prices for cars,
appliances, steel buildings,and other products made of steel. 

Contractors on road and bridge jobs that have already been bid are in a
squeeze because of the higher reinforcing rod prices and other steel
used.  In Michigan one contractor is already contemplating bankruptcy if
held to contracts for large road projects because of his increased cost
for steel.

Plywood, OSB and wafer board prices have more than doubled and are in
short supply in recent weeks so housing costs will be going up.

All this because of George Bush's Iraq war. All the above mentioned
products are being sent to Iraq as fast as they can be loaded in
containers to rebuild what our military has destroyed. How fortunate for
companies like Halliburton.

Dick Schmidt

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<div class=3DSection1>

<p class=3DMsoNormal><font size=3D2 color=3Dnavy face=3DArial><span =
style=3D'font-size:
10.0pt;font-family:Arial;color:navy'>Dick,<o:p></o:p></span></font></p>

<p class=3DMsoNormal><font size=3D2 color=3Dnavy face=3DArial><span =
style=3D'font-size:
10.0pt;font-family:Arial;color:navy'><o:p>&nbsp;</o:p></span></font></p>

While I&#8217;m not a big fan of =
our
involvement in <st1:country-region><st1:place>Iraq</st1:place></st1:country-region>, blaming the increase in steel prices seems a bit strange. =
I
follow a number of commodity prices because of my involvement in the =
paper
industry. In January, we were already seeing cancellation of steel =
deliveries
at several major projects in <st1:place>North
 America</st1:place>. My =
understanding is
that it has been to increased demand in countries other than =
<st1:country-region><st1:place>Iraq</st1:place></st1:country-region> (primarily =
<st1:country-region><st1:place>China</st1:place></st1:country-region>, but also =
<st1:country-region><st1:place>Mexico</st1:place></st1:country-region>, <st1:country-region><st1:place>Japan</st1:place></st1:country-region>, <st1:country-region><st1:place>South =
Korea</st1:place></st1:country-region>). I will be happy to post some URLs if you would =
like.<o:p></o:p>

<p class=3DMsoNormal><font size=3D2 color=3Dnavy face=3DArial><span =
style=3D'font-size:
10.0pt;font-family:Arial;color:navy'><o:p>&nbsp;</o:p></span></font></p>

But higher demand is only one =
reason for
the increased prices. Other changes that have occurred =
include:<o:p></o:p>

<p class=3DMsoNormal><font size=3D2 color=3Dnavy face=3DArial><span =
style=3D'font-size:
10.0pt;font-family:Arial;color:navy'><o:p>&nbsp;</o:p></span></font></p>

<p class=3DMsoNormal =
style=3D'margin-left:.5in;text-indent:-.25in;mso-list:l0 level1 lfo1;
tab-stops:list .5in'><![if !supportLists]><font size=3D2 color=3Dnavy =
face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial;mso-fareast-font-family:Arial=
;
color:navy'><span style=3D'mso-list:Ignore'>-<font size=3D1 =
face=3D"Times New Roman"><span
style=3D'font:7.0pt "Times New =
Roman"'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</span></font></span></span></font><![endif]><font size=3D2 color=3Dnavy
face=3DArial><span =
style=3D'font-size:10.0pt;font-family:Arial;color:navy'>Changing
currency rates<o:p></o:p></span></font></p>

<p class=3DMsoNormal =
style=3D'margin-left:.5in;text-indent:-.25in;mso-list:l0 level1 lfo1;
tab-stops:list .5in'><![if !supportLists]><font size=3D2 color=3Dnavy =
face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial;mso-fareast-font-family:Arial=
;
color:navy'><span style=3D'mso-list:Ignore'>-<font size=3D1 =
face=3D"Times New Roman"><span
style=3D'font:7.0pt "Times New =
Roman"'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</span></font></span></span></font><![endif]><font size=3D2 color=3Dnavy
face=3DArial><span =
style=3D'font-size:10.0pt;font-family:Arial;color:navy'>Coke
shortages<o:p></o:p></span></font></p>

<p class=3DMsoNormal =
style=3D'margin-left:.5in;text-indent:-.25in;mso-list:l0 level1 lfo1;
tab-stops:list .5in'><![if !supportLists]><font size=3D2 color=3Dnavy =
face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial;mso-fareast-font-family:Arial=
;
color:navy'><span style=3D'mso-list:Ignore'>-<font size=3D1 =
face=3D"Times New Roman"><span
style=3D'font:7.0pt "Times New =
Roman"'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</span></font></span></span></font><![endif]><font size=3D2 color=3Dnavy
face=3DArial><span =
style=3D'font-size:10.0pt;font-family:Arial;color:navy'>Increased
energy costs (electricity, natural gas, =
etc&#8230;)<o:p></o:p></span></font></p>

<p class=3DMsoNormal><font size=3D2 color=3Dnavy face=3DArial><span =
style=3D'font-size:
10.0pt;font-family:Arial;color:navy'><o:p>&nbsp;</o:p></span></font></p>

The prices of OSB and lumber have =
been
pretty volatile since the fires in BC this summer. The led to a much =
lower
inventory and combine this with the tariff dispute, a lot of BC sawmills =
cut
their production. With the increase in housing starts, this had led to a
continual price climb since July. It takes a while for this to reach =
some
consumers (depending upon contractual arrangements). I must admit that =
the
EXTREMELY high volatility of the OSB prices perplex me. But I doubt this =
has to
do with our involvement in =
<st1:country-region><st1:place>Iraq</st1:place></st1:country-region>.<o:p></o:p>

<p class=3DMsoNormal><font size=3D2 color=3Dnavy face=3DArial><span =
style=3D'font-size:
10.0pt;font-family:Arial;color:navy'><o:p>&nbsp;</o:p></span></font></p>

<p class=3DMsoNormal><font size=3D2 color=3Dnavy face=3DArial><span =
style=3D'font-size:
10.0pt;font-family:Arial;color:navy'>Bill =
Strand<o:p></o:p></span></font></p>

<p class=3DMsoNormal><font size=3D2 color=3Dnavy face=3DArial><span =
style=3D'font-size:
10.0pt;font-family:Arial;color:navy'><o:p>&nbsp;</o:p></span></font></p>

<p class=3DMsoNormal><font size=3D2 color=3Dnavy face=3DArial><span =
style=3D'font-size:
10.0pt;font-family:Arial;color:navy'><o:p>&nbsp;</o:p></span></font></p>

<p class=3DMsoNormal><font size=3D2 color=3Dnavy face=3DArial><span =
style=3D'font-size:
10.0pt;font-family:Arial;color:navy'><o:p>&nbsp;</o:p></span></font></p>

<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 =
face=3DTahoma><span
style=3D'font-size:10.0pt;font-family:Tahoma'>-----Original =
Message-----<br>
<b><span style=3D'font-weight:bold'>From:</span></b> =
vision2020-admin@moscow.com
[mailto:vision2020-admin@moscow.com] <b><span =
style=3D'font-weight:bold'>On
Behalf Of </span></b>Dick Schmidt<br>
<b><span style=3D'font-weight:bold'>Sent:</span></b> Saturday, February =
21, 2004
9:13 AM<br>
<b><span style=3D'font-weight:bold'>To:</span></b> =
vision2020@moscow.com<br>
<b><span style=3D'font-weight:bold'>Subject:</span></b> [Vision2020] =
Rising Steel
Prices</span></font></p>

<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 =
face=3D"Times New Roman"><span
style=3D'font-size:12.0pt'><o:p>&nbsp;</o:p></span></font></p>

<div>

<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 =
face=3D"Times New Roman"><span
style=3D'font-size:12.0pt'>All,<o:p></o:p></span></font></p>

</div>

<div>

<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 =
face=3D"Times New Roman"><span
style=3D'font-size:12.0pt'>&nbsp;<o:p></o:p></span></font></p>

</div>

<div>

I want to clue you in on what has been =
developing in
the steel industry. I have been involved in this industry since 1963 and =
we are
seeing the largest price increases and shortages I have ever =
witnessed.<o:p></o:p>

</div>

<div>

<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 =
face=3D"Times New Roman"><span
style=3D'font-size:12.0pt'>&nbsp;<o:p></o:p></span></font></p>

</div>

<div>

In December they were talking about $30.00 a =
ton
increase on products I am now selling, painted light gauge coil for the =
building
industry, for $1,375.00 a ton. Yesterday I heard that in the Midwest and =
east
coast they are now talking $450.00 a ton price increase.&nbsp;Re-bar =
(deformed
reinforcing rod) has gone up 300% in some cases. Some nail =
prices&nbsp;have
risen very fast with 16d (2-1/2&quot;) Common and 8d (1-1/2&quot;) =
Common
almost&nbsp;unavailable. Because the price of scrap metal is at an all =
time
high, in Detroit thieves had been stealing manhole covers and selling =
them to
scrap yards for $7 each until a law was quickly enacted to fine any =
scrap yard
found with manhole covers $10,000. We are going to be seeing the results =
of
this in the near future in higher prices for cars, appliances, steel
buildings,and other products made of steel. =
<o:p></o:p>

</div>

<div>

<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 =
face=3D"Times New Roman"><span
style=3D'font-size:12.0pt'>&nbsp;<o:p></o:p></span></font></p>

</div>

<div>

<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 =
face=3D"Times New Roman"><span
style=3D'font-size:12.0pt'>Contractors on road and bridge jobs that have =
already been
bid are in a squeeze because of the higher reinforcing rod prices and =
other
steel used.&nbsp; In Michigan one contractor is already contemplating
bankruptcy if held to contracts for large road projects because of his
increased cost for steel.<o:p></o:p></span></font></p>

</div>

<div>

<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 =
face=3D"Times New Roman"><span
style=3D'font-size:12.0pt'>&nbsp;<o:p></o:p></span></font></p>

</div>

<div>

<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 =
face=3D"Times New Roman"><span
style=3D'font-size:12.0pt'>Plywood, OSB and wafer board prices have more =
than
doubled and are in short supply in recent weeks so housing costs will be =
going
up.<o:p></o:p></span></font></p>

</div>

<div>

<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 =
face=3D"Times New Roman"><span
style=3D'font-size:12.0pt'>&nbsp;<o:p></o:p></span></font></p>

</div>

<div>

All this because of George Bush's Iraq war. =
All the
above mentioned products are being sent to Iraq as fast as they can be =
loaded in
containers to rebuild what our military has destroyed. How fortunate for
companies like Halliburton.<o:p></o:p>

</div>

<div>

<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 =
face=3D"Times New Roman"><span
style=3D'font-size:12.0pt'>&nbsp;<o:p></o:p></span></font></p>

</div>

<div>

<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 =
face=3D"Times New Roman"><span
style=3D'font-size:12.0pt'>Dick Schmidt<o:p></o:p></span></font></p>

</div>

<div>

<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 =
face=3D"Times New Roman"><span
style=3D'font-size:12.0pt'>&nbsp;<o:p></o:p></span></font></p>

</div>

<div>

<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 =
face=3D"Times New Roman"><span
style=3D'font-size:12.0pt'>&nbsp;<o:p></o:p></span></font></p>

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