Thursday, April 02, 2009

What goes up

Days when I wonder whether there will be anything to comment on always wind up with something pretty big. Big and bad as local economic news goes is US Steel's announcement that it is deferring its planned $billion or so investment at the Clairton Coke Works.

Why? The answer is buried in what has happened to Pittsburgh Seam coal prices over the last year:

$/ton, Pittsburgh Seam Coal prices

I'd still like to hear from anyone who know anything at all about a postcard I received last month or so on a public meeting in Lawrenceville where some company was going to talk about gas rights on local properties.


Anonymous MH said...

About 95% of graphs I've seen lately have that same shape.

Thursday, April 02, 2009 9:50:00 AM  
Blogger n'at said...

Not Nececellary:- All steel producers - Nucor, Amthor, USX, AL - have slowed production, furloughed labor, and/or halted major capital investments/improvements due to significant reduction in orders (demand), as well as, the credit market and availability of investment monies, both directly and indirectly.

The Clairton Works had some of their money encumbered for the project, but as the supplier to one of the few BOF steel producers left, Clairton had to throw capital investment to the wayside and shift labor into neutral to ride out this economic storm - as a supplier and as a business in need of a capital infusion at a reasonable interest rate.

Thursday, April 02, 2009 10:29:00 PM  
Blogger C. Briem said...

I agree.. I am just saying that most of that depressed steel demand is showing up in the price of Pittsburgh seam coal which is a metallurgical coal. I was going to put up a chart of the stock price of US Steel, but did the coal instead.

Thursday, April 02, 2009 10:47:00 PM  
Blogger n'at said...

Ah, I see. AEP and Allegheny Power are still buying though?

Seems as though the price of many raw materials were volatile or inflated over the same period we experienced the spike in fuel prices. Asphalt and Diesel indices are back to the Spring '08 levels, but steel, copper, etc. are deflating a bit more, no?

Friday, April 03, 2009 10:00:00 PM  
Blogger C. Briem said...

utilities buy more/most of their coal on long term contracts. I didn't explain, but that chart is really the spot price.

Saturday, April 04, 2009 7:05:00 AM  

Post a Comment

Links to this post:

Create a Link

<< Home