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August 31, 2009 Dear Friend,
A week ago we called on one of the
leading steel mill equipment suppliers, which is the key supplier to
Nucor, Steel Dynamics, John Correnti's Steel Development Co. and some
other minimills in particular. We review key advances in thin slab
casting and rebar micromills that may encourage entrepreneurs to build
capacity to attempt to "leapfrog" older competitors. We expect new
competition as steel has few barriers to entry unlike copper, nickel,
gold, met coal or other "tough to discover" minerals.
Nonferrous metals exchange
inventories continue to rise as traders "sell back" to lock in quick
profits as they deliver to exchanges. For example, LME nickel
inventories rose almost to a 15 year high despite the Vale Inco strike
that could last one year and create supply shortfalls. We believe
nonferrous base metals markets are tightening as the world economy
recovers despite the inventory data and that prices will remain firm
except for aluminum.
Faithfully,
John C. Tumazos |
Copyright © 2008 John Tumazos Very Independent Research,
LLC
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