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XMFSinchiruna (26.51)

Where Have All The Scholars Gone?



July 22, 2010 – Comments (10)

Is no one out there retaining the disciplne of following bellwether industrial earnings and outlooks in order to keep their finger on the pulse of the crucial American industrial base? I know the condition of many industrials is pretty severely impaired and therefore a bit depressing to observe, but since when does turning a blind get us anywhere?

Know the Real Dynamics of Steel

I continue to pour my heart and soul into my efforts to bring Fools as much information as I possibly can that is relevant to informing and maintaining an accurate macroeconomic worldview, and I concede that my process is intensive in terms of the number of factors I encourage Fools to consider and observe, but for this treatment of a steelmaker's earnings to receive just one rec during such a high-stakes moment of reversal in the fabricated recovery myth is slightly unnerving. :) Worse yet, that rec was mine. :P

So please, help me to know that someone beside myself has read this article and that I'm not just speaking to empty room. I don't want sympathy recs, so please only rec it if you like it... and if you don't, let me know why.

Remember how resolutely optimistic prior rounds of earnings from domestic steelmakers were. Does this not strike you as a rather significant change in tone? Meanwhile the talking heads are parroting Bernanke's reiteration of recovery expectations ... as if the Fed's revised outlook were not sufficint to interpret an acknowledgement of failure ... as if the Fed is going to submit a report saying that the recovery never was sustainable to begin with and was merely a momentary haze of deception that cost the taxpayer trillions.   As if.

10 Comments – Post Your Own

#1) On July 22, 2010 at 11:03 AM, rogermellie (< 20) wrote:

I work in the steel / aluminum industry and what you report from steel dynamics is confirmed by my work at Nucor Steel and US Steel (both in Alabama) - orders dropped off a cliff in June, at the Nucor plant down from 200000T/month (80% utilization) to 60000T/month. If you look at the St Louis Fed industrial utilization statistics (and I don't whether they lag by a couple of months), they show  cap. utilization stopped rising with last months figures - based on Nucor / US Steel I am expecting it to drop significantly in the coming months. Steel, for me, is a leading indicator. Last time the market dropped big time (Sepf/Oct 08), I was in Serbia at a US Steel plant commissioning an upgrade and we had severe problems as there was a lack of metal as orders had dropped off in August!!!!


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#2) On July 22, 2010 at 11:06 AM, starbucks4ever (86.26) wrote:

Gone to Wall Street, every one :)

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#3) On July 22, 2010 at 11:35 AM, catoismymotor (< 20) wrote:


Don't worry about the lack of recs. You can't control what will turn the heads of fellow Fools. Steel is not sexy like gold. As you know people will debate the true value of gold until they blackout at the keyboard. Steel is boring to the average investor. It could be there were too many "sexy" topics being discussed the day you posted.

With steel being in everything from thumbtacks to the latest sky scraper it is a very good indicator of production. If consumers are not spending money to drive production there is a good chance steel will be affected by a lack of demand. It makes sense. It is good old supply and demand at work.

Those of us that seek the facts (you) are not going to be mislead by the smoke and mirrors of butt-covering politicians in D.C. Those of us that look for clues to the factual health of the economy are better positioned to act, or not act, than the general public. I always appreciate your contributions. Please keep up the good work.


P.S. - + 1 Very Unsempathetic Rec!

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#4) On July 22, 2010 at 3:38 PM, Rehydrogenated (33.16) wrote:

Im invested in gerdau ameristeel (GNA), I would recommend them, but it seems they are being bought by Gerdau SA for $11 per share...which is bad because I purchased GNA at $17...

But if what roger says is true, I'm going to buy another steel company when the correction takes hold.

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#5) On July 22, 2010 at 3:41 PM, silverminer (30.05) wrote:


Thank you for your very valuable observations!

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#6) On July 22, 2010 at 4:38 PM, rogermellie (< 20) wrote:

I recommend any investor in steel to take a look at the US Steel stock price chart with a time span of 2 years from today's date.

Back in Aug 08 the stock traded at about $150/share (down from a high close to $200 at the end of June I think) - 2 months later the stock traded at about $30. I remember most of the US based managers in Serbia crying into their beers about their reduced 401-K plans. With the current order books down like they were back in Aug 08, I would tread very carefully here. 

Chris, if you have another steel related article in the next month I will try to get more info from my local companies about what the order books are looking like - knowing my luck, by then the market will already have told us where they are :)


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#7) On July 22, 2010 at 6:27 PM, djshagggyd (< 20) wrote:


Sometimes I am bad about forgetting to Rec articles on here that I read. Even ones that I really love.

I get excited about whatever it is I'm reading and then I start following all the links, etc... and I get distracted. 

Just know that Rec or no Rec, I very much appreciate the work you and other "official types" do around here.

You are a fantastic writer and I've learned a lot from you.

Thank you!


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#8) On July 27, 2010 at 4:19 PM, rodney15 (< 20) wrote:

I see that you've said orders have fallen which is what happened before it crashed bigtime, but do you think a similiar crash is upcoming? Year over year its lose wasnt as bad but from what i've read US Steel predicts a Q3 profit..

 whats your opinion on the stock price over the next few months?

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#9) On July 27, 2010 at 4:35 PM, ragedmaximus (< 20) wrote:

My lowly opinion short and sweet all bailouts are ended and thus economic spurt has sputtered,people have been through the ringer and are trying to pay off debt and more frugal now.unemployment numbers are false,bank stress tests are bs and the rosy earnings are bs.don't believe it and buy now for gods sake this is what they want someone to dump overpriced crap mirage on us the retail investor.after the upcoming crash and complete bottom the markets will slowly recover over 5 years

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#10) On July 29, 2010 at 1:59 AM, Mstinterestinman (< 20) wrote:

If you buy a Steel company buy Nucor and hold it long term that is all.

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