Industrial Insight

Mining

May 27, 2015
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http://www.thestreet.com/story/13162949/1/mining-stocks-may-be-golden-again–and-you-probably-dont-have-enough.html

But that’s all over now. BHP Billiton (BHP), Rio Tinto (RIO) and Anglo American(AAUKY), all large global companies, have now removed the key managers "who did a less-than-perfect job" during the super cycle, he adds, citing poor capital allocation decisions.

"The order of the day is to get the business right-sized," he says. Put another way, that means there’ll be a smaller supply of metals and minerals hitting the world market in the medium term.

In case you forgot, lower supply when demand remains constant tends to mean higher prices.

The wake-up call to management is also leading companies to make business plans that do not depend on prices of minerals rising. That means simply that projects are being started with an eye to a sustainable return on capital rather than what Wickwire calls "chasing production for production’s sake," as happened often during the supercycle.


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We are still here manufacturiing…

May 27, 2015
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http://www.themoneyillusion.com/?p=29441

Now America has de-industrialized. And yet, we somehow managed to increase industrial production from 83.7 in June 2009 to 106.2 at the end of 2014. That’s an increase of 22.5. But 22.5 is just the change in an index number, what does it actually mean? Well in March 1961, soon after JFK took office, America’s industrial production stood at 22.2. That’s right, Obama presided over a boom in industrial production larger than the entire industrial production of the US in March 1961! (And recall that IP is a real index, adjusted for price level changes.)

Misleading? Off course, but still kind of interesting. Note that America’s population has grown since 1961, but it hasn’t even come close to doubling. Meanwhile IP is up nearly 5-fold.

PS. IP peaked at just under 46 in November 1973, generally regarded as the date when the post-WWII industrial boom ended.


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Scrap prices stable and low.

May 27, 2015
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Copper prices show modest decline , still above bottom and still lower than recent prices.

May 27, 2015
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Oil prices also show modest increase still at low levels.

May 27, 2015
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Steel production showing increase but still at low levels.

May 27, 2015
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Oil prices set to decline in third qtr.

May 19, 2015
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What’s next for oil prices? After rallying by about 40% since their lows earlier this year, forecasts now by major banks paint a mixed picture but one that increasingly looks like a W-shaped recovery.

The average forecast in a MoneyBeat survey of 10 banks is for Brent, the global benchmark, to fall to an average of $63.35 a barrel in the third quarter of this year, down from around $66 on Tuesday. West Texas Intermediate, the U.S. marker, will average $58.40 a barrel next quarter, down from about $59 a barrel on Tuesday, according to the survey.


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Scrap prices stable at lower level

May 19, 2015
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Copper prices showing strongest recovery suggesting support for mining

May 19, 2015
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Oil prices also showing modest recovery but still at much lower level.

May 19, 2015
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About author

I'm the executive vice president for a steel casting trade association, the Steel Founders' Society of America. I've got a crazy wife, five crazy children, three crazy people that married into the family, and two crazy fun little grandsons.

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