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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Spekulatius who wrote (19945)	10/24/2004 4:37:20 PM
From: perspicar	Respond to of 78714

re Steel stocks ... Just FYI, the reason car sales in China fell so much is because the government halted financing of auto purchases in their effort to 'soft land' the economy. However, volumes are up in spite of this. Prices seem to be hovering between 520 to 680 per ton depending on grade and delivery terms. The next pricing round will be crucial. Also note that key Steel inputs such as metallurgical coal are trading at high prices too. The stocks are still priced on midcycle earnings, but I suspect that the bottom part of the cycle averages should be excluded from the calculation. Minimal new capacity is coming online until Q4 2005. 2006 capacity additions will be heavy (particularly in China), so it could be over a year before we see any let-up if demand holds.