Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Non-Tech : RECY Looking Good... A -- Ignore unavailable to you. Want to Upgrade?

To: Miguel M. de la O who wrote (5894)	9/28/1998 1:20:00 AM
From: stephen wall	Read Replies (1) \| Respond to of 7006

Miguel, From New Steel magazine, September 1998: Iron Age Scrap Price Bulletin. US Steel Production/Price Data: ....................Last......2 weeks........To date.........To date ....................Week........Ago.............1998............1997 Net tons...2,066.......2,013..........65,702..........63,038 (Thsnds) Capacity....86.0......83.8............90.1............89.4 Utilization Rate ------------------------------------------------------------------ ------------------------------------------------------------------ Steel Production by Districts (thousands of tons) .......Last Week...2 Weeks Ago......Last Month......Last Year Notheast....179..........164.............191.............154 Pittsburgh..290..........275.............260.............231 Lake Erie....134..........138.............126..............90 Detroit........133..........136.............135.............147 Chicago.....549..........546.............481.............491 Southern....442..........431.............429.............427 Midwest.....222..........207.............233.............257 Western.....117..........116.............113.............125 Total.....2,066........2,013...........1,968...........1,922 Please note these figures are for US Steel Production only. While imports have also dramatically increased, we are in a healthy economy. My take on RECY share price decline is from Standard and Poors debt downgrade, the threat of pig iron imports from the Ukraine and Latin America. While scrap prices have come down, so have pig iron prices, which historically are appreciably higher per net ton than scrap. But remember energy cost to produce steel melt with pig iron vis-a-vis scrap is also higher. Also remember the scrap business is very, very regional. Surplus scrap in the West has no direct impact on scrap price in the South or Southeast. Transport costs are prohibitive. If it is true that RECY works off of inventory turns and purchases from scrap collectors on a "Sell to order" basis, and the above stats from New Steel are accurate (I have subscribed for the past year and have no reason to believe otherwise), then things may not be as bleak as assumed. However, their debt leverage is troublesome. stephen

To: Miguel M. de la O who wrote (5894)	9/28/1998 9:23:00 PM
From: James Strauss	Read Replies (1) \| Respond to of 7006

>>>I guess the real issue is why scrap prices are so low, and whast is the prospect for their rise. Jim?<<< ********************************************************************** Miguel: Current deflationary trends and weak Asian markets are the culprits... If the FED cuts rates, so will other countries... Kohl lost in Germany because his economic policies were too restrictive... I expect that Schroeder will go along with a rate cut... Lower interest rates are the right medicine for a deflationary environment... Eventually this will be good for Scrap prices... Jim