American steel showing some strength
The New York Mercantile Exchange is going to start trading steel later this year -- a solid reflection of rising steel prices and corporate profits. American steel companies are booking record earnings. John Dimsdale reports.
Extruded steel bars are cut at the TAMCO steel mill in Rancho Cucamonga, Calif. (David McNew/Getty Images)
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KAI RYSSDAL: This is Marketplace from American Public Media. I'm Kai Ryssdal with this test of your commodities market savvy.
If you wanted to trade steel futures, where could you go? London's an option. India and Dubai offer steel contracts, too. If you're looking to keep your money in this country, though, you're out of luck -- for just a little while longer. The New York Mercantile Exchange announced today it's going to start trading steel by the end of the year.
That market interest is one solid reflection of rising steel prices. Corporate profits are another. American steel companies are booking record earnings, as Marketplace's John Dimsdale reports.
JOHN DIMSDALE: The cheap dollar and overseas demand are pumping new life into an old, domestic industry. Robert Griggs is the president of St. Louis-based Trinity Products, which sells steel construction materials and signs around the country, and now Canada as well.
ROBERT GRIGGS: I've met with people recently from Saudi Arabia, from Turkey, from Greece. I've gotten lots of quotes from people asking us to make material around the world. So I think we could become a steel exporter.
Over the last 10 years, 40 or 50 steel companies went bankrupt. But Scott Paul of the Alliance for American Manufacturing says good times are here again.
Scott Paul: We've seen about 18 months of prosperity for steel, but that comes on the back of about three decades of bloodletting.
The outlook should be rosy for a while, since steel users have few alternatives. Besides, prices for aluminum and plastics are also going up. But Scott Paul says the profits are attracting lots of new suppliers.
PAUL: In fact, China has brought on about 400 million metric tons of new steel capacity just over the last couple of years. And if there is a worldwide economic downturn and demand in China and other countries decreases, we're gonna see a glut of overcapacity.
In the meantime, steel's high price will show up in consumer prices for cars, appliances and cell-phone service -- even steel cell-phone towers cost more.
In Washington, I'm John Dimsdale for Marketplace.
