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"And the second is the huge export boosts from China in iron and steel. (alleged in the article to be below cost but there wasn't really any support for that ar
by JacobAldridge 11y ago
"And the second is the huge export boosts from China in iron and steel. (alleged in the article to be below cost but there wasn't really any support for that argument.)"
The quote from the article is “China is selling below the price of recycled steel”.
I interpreted that to mean that at current prices new steel from China sold at the market rate is cheaper than recycled steel. So no 'below cost' shenanigans, just comparable products moving in out-of-sync market cycles.
And yes, businesses the world over can be guilty of not reinvesting in facilities. There's a mantra for change that says "If we always do what we've always done, then we'll always get what we've always got". Unfortunately, many business owners in good times think that's true as well! And so they fail to make the necessary improvements when they can, and can't afford it when they have to.
- wisty 11y agoOr it could be that Chinese companies were stockpiling steel (as the price was rising), and are now trying to sell it off now that the price is dropping. So if you've got a great big lump of steel, it's not cost effective to break it apart to sell right now.
- bigger_cheese 11y agoI work in the steel industry, virgin steel not recycled steel and we are having the same problems. China has so much excess domestic steel capacity that they are now flooding the international export market and the price of Coil has tanked. http://www.smh.com.au/business/mining-and-resources/chinese-steel-is-now-cheaper-than-cabbage-20150708-gi81ea.html http://www.smh.com.au/business/mining-and-resources/chinese-... 'When asked about the cabbage conundrum, one trader told Platts he would be "better off going home to plow the fields rather than try to make money selling steel".'