FTSE100 now officially in bear teritory

Crashy_Time

cells wrote: »

I dont know what the operating costs are in china but I do know that most of their steel plants were built with labour much cheaper than today and wage inflation has paid off the assets

China or not the robots and productivity and better methods are destroying the number of jobs in the steel industry. I used to work at a steel plant that had 30,000 men and produced 1 million tons a year. by the time I left it was closer to 2,500 men and 3 million tons of steel. I can see it going to 1,000 men and 4 million tons of steel so there is a 70% jobs cull coming to the steel industry worldwide over the next couple of decades

And who is going to be buying all the steel?

wotsthat

Crashy_Time wrote: »

And who is going to be buying all the steel?

January 2016 - the month steel sales stopped and humankind started going backwards.

Generali

cells wrote: »

blast furances are only really designed to run at 100% or 0% and then its a hell of a job starting up again

they will close some steel plants and it wont be the end of the world. plenty of steel plants have closed in the west (well before china was even a thing)

I don't claim to know how they do it but the US Steel industry body claims a capacity utilisation rate of <100%.

cells wrote: »

its just a case of shredding the excess. the steel industry will survive. just like the farming sector cant go bankrupt nor can commodities or steel just some players need to go to the wall for the rest to continue

however in the last steel downturn in 2008-2010 there was a reasonable recovery as the world didnt end and there probably will be again

Yes. Less efficient producers will be driven out of the market and the rest will thrive. We're not going to stop using steel any time soon.

purch

Generali wrote: »

Less efficient producers will be driven out of the market and the rest will thrive. We're not going to stop using steel any time soon.

Yes, this is how the World works.

Natural selection. The strong survive, the weak don't. As long as we allow that to happen then ultimately we all end up stronger.

Of course the crashes and recessions happen when we think we can buck the trends.

cells

Crashy_Time wrote: »

And who is going to be buying all the steel?

Steel is used more than all the other metals combined so who is going to buy the steel...well everyone

cells

Generali wrote: »

I don't claim to know how they do it but the US Steel industry body claims a capacity utilisation rate of <100%.
.

They probably turn some off. For instance I believe port Talbot steel works is 3 blast furnaces of about 1 million ton pa each. If you want to rub at 70% you are probably going to close one and run the other two on fill capacity so overall the plant is at 66% but the furqncea are 100% or 0%

Even then it's a hell of a job turning one off or on without wrecking it

N1AK

cells wrote: »

Steel is used more than all the other metals combined so who is going to buy the steel...well everyone

I think you're missing the nuance of all everyone drinks fresh water, it doesn't mean that if you could build a massive desalination plant that produced enough for a billion people you'd immediately find enough demand at a viable price to sell it all.

kabayiri

cells wrote: »

that does not sound that big a loss. China has about 300 big steel plants (or the equivalent) so only about $15m lost per plant and only about $5 per ton of steel. I think your $5 billion figure is probably some pie in the sky in that its probably plucked out of think air neither too high or too low just a pure internet guess

On the radio they mentioned a loss of $35 per ton.

Something doesn't add up, as you say.

kabayiri

purch wrote: »

Yes, this is how the World works.

Natural selection. The strong survive, the weak don't. As long as we allow that to happen then ultimately we all end up stronger.

Of course the crashes and recessions happen when we think we can buck the trends.

Arguably, the strongest of the strong is an entity which is dumping product at below cost price, supported by the state.

Perhaps we should try and sell our steel to Chinese customers at £3.50 per ton; see what their response is.

N1AK

kabayiri wrote: »

Arguably, the strongest of the strong is an entity which is dumping product at below cost price, supported by the state.

Perhaps we should try and sell our steel to Chinese customers at £3.50 per ton; see what their response is.

One of the arguments for not restricting this kind of behaviour is that we are effectively being subsidised by the Chinese government in the short term. The trick is avoiding them gaining a monopoly in the long term and exploiting it.