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MSO Crisis Newsletter - Edition 1 © 2005 all rights reserved
MAy 1, 2005, by alan gamble
I'd like to welcome you to the 1st edition of the MSO Newsletter. We
look forward to sharing important industry news each month, and how
Metal Suppliers Online can support your business needs and metals
requirements in these dynamic times.
April Highlights:
.
Trace_Applications_-_Newsletter_Sponsor_of_the_Month
.
China_Explodes,_And_The_Sleeping_Giant_Awakens
. The_Eyes_Have_It
. Excess_Inventory...Got_It_Need_It
. The_Urge_To_Merge
.
Mid-Winter_Slump,_or_Slowdown_Ahead
Be sure to take the MSO Poll, and see how your response compares with others.
Sincerely,
Alan Gamble, CEO & Founder
[send comments to our
CEO]
Trace Applications - Newsletter Sponsor of the Month
"MetalTrace™, Mill Test Report (MTR) traceability software developed by Trace, has seen exceptional acceptance by our clients," stated Ted Power, President of Trace Applications Inc. "Being solely focused on providing QA/QC document management software and services to clients has allowed us to become significant market players during 2004 and that trend will continue in 2005."
Headquartered in Edmonton, Alberta, Canada, Trace Applications Inc. is a privately owned and operated company. Trace delivers MTR MSDS software for document imaging and document management for Quality Assurance and Quality Control (QA QC), 100% tracking and traceability of Mill Test Reports (MTR), Material Safety Data Sheets (MSDS), food, diamonds, tools, inventory and laboratory results. Businesses in the steel industry, food, diamond, laboratories and those dealing with chemicals and dangerous goods will benefit from the industry best practices and the workflow improvements achieved as a result of using Trace Applications software.
[Interested in becoming an MSO Newsletter Sponsor? Contact Alan Gamble, CEO & Founder]
China 'Explodes', And The 'Sleeping Giant' Awakens
High metal prices will continue for some time to come, driven today by China's explosive growth, but watch out, India the "sleeping giant" is not far behind.
As metals buyers, we can deal with higher prices as long as they don't continue to rise uncontrollably. What's hurt our industry most has been the uncertainty of the last 18 months. Scrap, coke, and iron prices may decrease some, but never to the levels they once were, and US steelmaking capacity is not likely to grow at a pace to keep up with demand, especially in the specialty metals market - Inconel, Hastelloy, and all the high nickel alloys.
According to Alan Gamble, CEO & Founder of Metal Suppliers Online
(MSO), "the bigger issue moving forward is delivery and that's where
MSO has the advantage. What this means to our Customers is that our
strong relationships with our Chinese and European sources enable us
to effectively support their requirements. While US mills are
typically quoting 30-40 week lead times, MSO has been successful in
getting material from China and Europe in 6-7 weeks."
The 'Eyes' Have It
U.S. imports of specialty steel products increased 24 percent in the first 10 months of 2004, led by a 30-percent jump in imports of stainless steel compared with the same period a year earlier, according to the Specialty Steel Industry of North America (SSINA).
Successful US companies are increasingly turning their eyes overseas because domestic producers of specialty metals simply don't have the production capacity to serve the U.S. market, opening the door for foreign producers. As a result, U.S. specialty metals buyers MUST look overseas to fulfill their requirements.
How can MSO Help?
MSO is a global sourcing network, specializing in time sensitive
specialty metals and alloys. With over 75,000 registered users, we
are the leading worldwide provider of industrial metals on the
Internet. MSO can be your sourcing conduit, making it simple and
easy to find and acquire the metals you need.
Excess Inventory...Got It? Need It?
"One man's ceiling is another man's floor", so says
Simon and
Garfunkel. And, MSO agrees!
While high metal prices are causing stress among buyers, companies
who hold prime excess inventory are reaping a great benefit. In
years past, you would be lucky to get pennies on the dollar for your
excess stock. Today, we're seeing companies regaining 50-75% of
their original purchase price. MSO offers the
Excess Inventory
Network (ESN) where companies can list their prime excess inventory.
The Urge To Merge
A major trend in the metals industry over the past 12 months has
been consolidation and acquisition. The biggest deals have been:
Merger of Ispat, ISG Forms Steel Giant
- Ispat International has agreed to
acquire LNM Holdings for $4.5 billion, and create a new steel company, Mittal
Steel. The new company will then merge with International Steel
Group Inc., North America's No. 1 steel producer. The merger
will create the largest steelmaker in the world, with the capacity
to ship 60 million tons of steel per year.
Ryerson Acquires Integris
Ryerson Tull Inc. has agreed to
acquire Integris Metals Inc. in a deal that combines the service
center industry's number one and number four
competitors. The $660 million deal was expected to close by late January.
Mid-Winter Slump, or Slowdown Ahead?
Manufacturing has slowed significantly in the past several weeks and market analysts and mill executives are blaming everything from seasonal factors to a surge in imports. Buyers are confused about the direction of the U.S. and global steel markets and they are holding back PO's, causing carbon steel prices to slip for the fourth straight month. Strong differences of opinions exist between sellers and buyers of steel mill products about where 2005 pricing is heading.
