MetalDirector

1 Comment

    • Commercial Metals Earnings and the Domestic Steel Market [view article]
      Your comment was "Many analysts during the call were asking CMC executives why they are not selling into these much higher priced markets? CMC responded that their production was at 100% just to satisfy domestic demand, and if they had any spare capacity they would ship overseas for those much higher margins. The shipping cost are only between $80-100 a short ton."

      Does this make sense to you? It doesn't to me.

      I am a director of a primary mill and several metal related convertors.

      If they are at 100% of capacity, microeconomics tells us, that they should raise their price until they have reached equilibrium - not 100% of capacity - if the world price less freight is still substantially above the domestic price. The only rationale for submarket pricing is new market share, but with construction down and energy up, higway construction costs and cement will preclude a domestic spending program from any job creation policy for the next president.
      Jul 02 11:41 AM
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