Steel prices fall dramatically
Kai Ryssdal: Not all prices are created equal, though. In another sign of a faltering global economy, steel prices are off 30 percent since this spring.
Marketplace’s Sarah Gardner has that story.
Sarah Gardner: In April, steel was a hot commodity, selling for close to $900 a ton.
Bridget Freas: And that was based on expectations of demand really starting to pick up.
Expectations that didn’t pan out, says Morningstar analyst Bridget Freas. Instead, demand is sort of muddling along. Now, steelmakers have too much supply. Freas says the market’s correcting itself and fretting about future demand, worries fed by Europe’s money crisis, slower growth in China and the general global malaise.
Analyst Mark Parr at KeyBanc Capital Markets.
Mark Parr: Certainly there’s a lot of concern, people are discouraged, unemployment is high.
A few big European steelmakers have temporarily idled some production lines. About half of steel’s business comes from construction, an industry still in the doghouse. Steel’s other big customer, the auto industry, is recovering, but slowly. And some steel buyers are simply holding off, waiting to see if prices fall even further.
I’m Sarah Gardner for Marketplace.
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