Stephen...
An excellent article you posted on the EPA. An important quote from it is as follows:
>>The ruling, although significant for the recycling industry, is limited to "processed, unprocessed home, and unprocessed prompt" scrap metals destined for recycling. EPA was unwilling to deregulate what the agency calls "obsolete" recycled materials such as automobile hulks, railroad cars, and steel beams.<<
Good uptick in price over the week. Today was good volume on a poor market day.
IMHO the days of this being a $5 stock are probably gone for awhile.
The Korean situation, however, is not finished. The notes outstanding must be covered by the end of March, as I understand it. That's a nasty time of year anyway for small stocks (tax time). If something about these Korean debt rollovers gets funky, it will go around. The Indonesian situation is just starting to cause ripples.
So, drink your water at the stream while kneeling down!
Just on a psychological note: it would be a really good idea for everyone to keep the smug bullishness to email. It attracts sharks.
A clearly businesslike attitude toward the stock's appreciation will go a long way for every single long holder.
Ed
BTW from your earlier article about the Asian scrap situation, the follow statements bear thought:
>>West Coast exporters had expected heavy melt prices to rise steadily. But now it looks like, by the end of December, the
average ton of No. 1 heavy melt will be making the trip to Korea for something under $150 delivered, a few dollars less than
in October. That's an unfortunate twist of fate for people who had been stocking up in anticipation of $160-a-ton markets or
better.
"Korea and Taiwan are still buying some scrap, but right now they're buying at $154 a long ton, about the same as the last
two months," a California broker said in early November. "There just aren't many buyers in Asia right now. They can't get
any hard currency."
The Asian prices also are responding to some longer-term developments that many saw coming. For one, there has been
increasing pressure for higherquality scrap from some Asian buyers since early 1997; this has begun to threaten processors'
profits too.
It's a longstanding joke in the scrap business that there should be a No. 3 heavy melt category, to describe the off-spec stuff
overseas rebar makers were willing to put up with to get their hands on U.S. scrap. Most of the scrap generated in Asia itself
has tended to be low-quality demolition scrap in unprofitably small quantities, so buying from the U.S., Europe, Japan, or
Australia was a requirement.
Two things changed that. One, much of the new capacity being installed in Asia is designed to chase the high-end, high-profit
markets for cold-rolled, galvanized, coated, and other higher value-added steel. Posco, Hanbo, and Nakornthai are among the
new Asian mills installing thin-slab casters fed partly by alternative irons. This is a big change from the traditional one-bucket
rebar shops that accounted for many Asian scrap buyers until recently.
The demand for higher-quality scrap has been rising in Asia-without bringing prices along. "The days when Korea was the
world's garbage dump are past," the broker says. "You can get away with a lot, making rebar. But now everybody's trying
to get the good scrap for the same prices."
The other factor is that as manufacturing grows and matures in Asia, scrap has begun to pour out of factories there in volumes
never seen before. This is not the haphazard stuff traditionally picked out of fields by peasants, but bona fide plate and sheet
and turnings in the standard forms common in industrial countries. The U.S. exporter, accustomed to being the one to beat,
now has to compete for sales with local scrap suppliers-many of them subsidiaries of the steelmaker in question-on a more
or less equal basis.<< |
