February 2010 | Steel Tracker
US recovery sustained: Flat Product Analysis-North America & Europe
Under tight supply conditions in an economy enjoying a sustained recovery US steelmakers could expect to pass on the higher raw materials prices that are about to hit them, but several factors could be working against them.
The US recovery is still fragile. The Federal Reserve, cautiously winding down some of its special aid to the economy was careful to limit the first rise in its discount rate for a year to a modest 0.25%. This caused some nervousness, but the main immediate impact was seen on the currency. The trade-weighted value of the dollar returned to the high levels of mid-2009 and moved as much as 0.75% up against the euro. The currency change itself was more important than the direction change; it might make imports (whether of steel or anything else) marginally cheaper, but such volatility makes import deals unattractively risky.
Unemployment figures have been equivocal: while the rate fell from 10% to 9.7% in January helped by 11,000 new jobs in manufacturing there was a surge in new applications for unemployment benefit at the end of the month. Industrial production...
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