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Michelle Galanter Applebaum  

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  • An Emerging Problem With Steel Prices [View article]
    Did you intend to post this article six months ago before the chinese cut back their steel consumption 20%?
    Jan 27, 2012. 12:25 AM | Likes Like |Link to Comment
  • March Chinese Steel Production Slips 1.2% from February's Record [View article]
    Sorry markethost, but our lawyers get all bent out of shape when we comment about individual stocks in this blog; since my lawyer is the man I sleep with (my hubby of 35 years David) I kind of need to comply. Most of our work is indeed stock research but we only make that available to institutional customers. So sorry!!!!
    Apr 22, 2011. 12:07 AM | Likes Like |Link to Comment
  • Steel Outlook 2011 - Volatility Is the New Black [View article]
    The comment that the mini-mills own scrap processors and they're "helping" create volatility is a bit silly; do you think they own big scrap mines and then dig it out of the ground? Scrap prices are volatile because there are people who sell scrap and they like to make profits too; scrap has a pretty quick supply-response to prices so that when prices run up, peddlers sell more scrap and then the supply response presses prices back down a bit. And so on. When prices are low, who cares, they can let the scrap sit around till prices are higher. The mills can't control the volatility. And steel prices in China are much more volatile than in the US and China uses very little scrap in their steelmaking mix - so it's not just scrap that is driving this volatility!
    Jan 5, 2011. 10:28 PM | Likes Like |Link to Comment
  • June Chinese Steel Production Down Nominally [View article]
    First, I am in the stock market advisory business, and I can't really give you earnings or stock advice unless you're a customer, my lawyer gets pissed off and he's my husband so I like to keep him happy! Second, be careful in how you make reference to China's latest announcements, because I would say it a little differently - I would say "China is SAYING they're consolidating" because this has been going on for a half dozen years. I honestly think Beijing has been trying hard to do things that the provinces just won't support. So I don't know that the consoldiation/closures are really happening - it's hard to take it seriously after watching these things "almost" happen in the past. The supposed "big difference" this time is elimination/reduction of export tax rebate, however, even THAT is looking more and more like it's a Trojan Horse - meaning it's not at all what it seems to be. Because the "higher value" steels saw an INCREASE in their export tax rebate - and now the steel industry trade press is picking up on "circumvention" activity - adding boron to commodity grade hot-rolled steel appraently is enough to upgrade the steel to value-added - hence export tax rebate - status. So I'd say "same old same old" and while I do hope for the best, I also prepare for the wost.
    Jul 19, 2010. 11:42 PM | Likes Like |Link to Comment
  • June Chinese Steel Production Down Nominally [View article]
    How does the economy of scale work for producing 4x as much steel? I always thought economy of scale was a plant specific thing, and since China's average plant size is the SMALLEST in the world, I am surprised you think they have the economy of scale
    Jul 16, 2010. 08:58 AM | Likes Like |Link to Comment
  • June Chinese Steel Production Down Nominally [View article]
    That's simply not true. China uses tax policy to drive economic growth and they're entitled to do that! They've done a great job, it's just amazing that the Chinese have managed to keep their steel production within 10% - plus or minus - of domestic demand every year. The problem is two fold - if they overshoot steel demand by 10% today, they typically ship the excess into the global market. 70 million tons could obliterate most of east Asia. It's a scale problem. Also, they can subsidize and nurture the heck out of any industry they want - it's a free world - but they can NOT subsidize their high cost steel business, dump the steel into the US market, and force closures of domestic capacity so that the US market becomes net short when the US is the low cost producer. Wait a minute - they can't do that because JAPAN ALREADY DID in the 1980s. More and more consumers of things that are now "made in China" are realizing that this is a SHORT RUN benefit - UNLESS China has true comparative advantage in production costs. Steel they do not. End of story. :)
    Jul 15, 2010. 06:46 PM | Likes Like |Link to Comment
  • June Chinese Steel Exports Hit New High (Again) [View article]
    Hi - email me if you want to discuss?
    Jul 13, 2010. 11:04 PM | Likes Like |Link to Comment
  • June Chinese Steel Exports Hit New High (Again) [View article]
    You actually hit the nail on the head but backwards - the scale issue is on a per-plant basis, not the total tonnage. China has a scale disadvantage because the bulk of the industry's capacity is small-scale. Beijing THINKS they have a scale advantage for buying raw materials but don't understand that raw material purchases work the other way around - China actually has to bid UP acquired raw materials because they're such a large buyer they require incremental capacity to feed their demand. I've been surprised they have had so much trouble purchasing, because historically China has traded commodities extraordinarily well, particularly for a "communist" economy.
    Jul 11, 2010. 12:14 PM | 3 Likes Like |Link to Comment
  • June Steel Report: Import Licenses Drop, China Surges [View article]
    Now this is something I have said since 2003. I thought that the logical direction for China back then was to invest in slab-making facilities near mines in joint ventures with the mining companies (exactly like the new Thyssen/Vale venture in Brazil coming on line in the next few months). I cannot understand why the strategic decision was made to be a bigger buyer of iron ore - rather than steel. Steel is a far more fragmented market and the miners in places like Brazil and India (and I know the issues of JV-ing between China and India) would have been very interested in these JVs back then, so the ore would have been "quite competitive" for the local steel mills. The fact that they did not do this when it was so clearly a good strategy tells me there is something I am not considering in terms of their thought process. Perhaps national defense kind of thing.
    Jul 10, 2010. 02:21 AM | Likes Like |Link to Comment
  • June Steel Report: Import Licenses Drop, China Surges [View article]
    What you're saying does make sense except that the Chinese aren't competitive in the value-added steels either. For example, OCTG is among the most value-added and labor-intensive (where China should have the most advantage) but even so, Canada, Europe and then eventually the US all ruled that the Chinese were subsidized and were dumping these products. Also you have to take into account that the US has tariffs on hot-rolled steel (which had the rebate eliminated) but not on the value-added products that are made out of hot-rolled steel, cold-rolled, coated, etc. The elimination of the rebate on exports of hot-rolled is essentially a subsidy to the value-added products (which are made out of hot-rolled). And also the US doesn't have tariffs on those value-added products.
    Jul 10, 2010. 02:18 AM | Likes Like |Link to Comment
  • China Announces Another Steel Capacity Closure Campaign - Risk of High Cost, Low Priced Exports Remain [View instapost]
    The ship of fools in DC is getting it more than anyonehas gotten it in as long as we can remember; keep writing/speaking/educa... because the rest of the country is getting it in a way I truly couldn't have ever imagined. But keep the volume on max and never give in, never give in, never; never; never; never.
    Jun 4, 2010. 11:33 PM | Likes Like |Link to Comment
  • Why Is America the Biggest Importer of Steel? [View article]
    aks your employer CISA, it's called dumping
    Apr 16, 2010. 12:50 AM | Likes Like |Link to Comment
  • Why Is America the Biggest Importer of Steel? [View article]
    China has no usable iron ore. What's the diference. Ask your employer, CISA.
    Mar 19, 2010. 04:18 PM | Likes Like |Link to Comment
  • Why Is America the Biggest Importer of Steel? [View article]
    Again, you are paid by the Chinese because there isn't a bona fide steelplayer on the face of the planet that would say the Chinese do a better job of serving the US market than the US producers. I have no idea what flame means.
    Mar 19, 2010. 04:17 PM | 1 Like Like |Link to Comment
  • Why Is America the Biggest Importer of Steel? [View article]
    Free trade rests on the concept of comparative advantage. Mercantilism rests on the concept of beggar-thy-neighbor. The American economic establishment is so blindly pro free trade that they don't see mercantilism when it's in their face. This is because of our own collective guilt about Smoot Hawley - we started a trade war in the 1930s that plunged everyone into the abyss- so economists in this country for the last few generations have been raised in this myopic little hothouse of "free trade" thinking. Other countries for the most part are calling China out for what they are - and in fact the US is getting it more and more every day.
    Mar 18, 2010. 11:13 PM | Likes Like |Link to Comment
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