A Midsummer Night's ... Review
July 14, 2008
At Industrial Heating, our goal is to provide value to you, our reader. We do this in a number of ways through multiple channels. We strive to provide technical content that will help you to do your job more effectively, efficiently and productively. This content is delivered to you each month in print, and it is also available on our website (www.industrialheating.com). The same is true of our regular monthly columns. Additionally, our website offers resources not found in the pages of Industrial Heating magazine. Check our website regularly for daily news updates, The Experts Speak updates, additions to our Bulletin Board and online searchability of our various directories.
Our monthly columns – including this editorial – are designed to address issues of interest to our industry and get us thinking about how the happenings in our world affect our industry. We know that you don’t have the time to seek out this information, so we do the work for you. To illustrate this, perhaps a review of recent editorials might prove informative.
In January, amidst much economic negativity we predicted a “healthy year for the global steel industry.” A couple of the negatives we discussed were the rising costs of raw materials as well as the cost of energy and possible CO2 emission penalties. As I write, the news is replete with the discussion of the good health of the steel industry, high costs of raw materials, and, during May’s AISTech 2008, industry executives expessed their concerns about the impacts of emission standards proposed in the Climate Stewardship and Innovation Act of 2007. Their concern is that steel production may be forced to economies such as China if this type of legislation is enacted in the U.S.
In February, I encouraged a big-picture approach when considering candidates in the primary elections. We indicated that oil prices were rising because of the global competition for these natural resources. We all know what has happened to gasoline prices in the last several months! Another thing we discussed was the change occurring in the U.S. economic model. This change, if allowed to continue to develop, will increase the economic gap between the U.S. and the rest of the world. Your objective in the coming months is to determine if the change being demanded by our candidates is progressive or regressive.
In March, we went out on a limb to encourage a more optimistic approach for our economic outlook when everyone felt recession was assured. Our encouragement was to “continue to invest for the future because … any downturn in 2008 is likely to be short-lived.” At that time, heavyweights like Alan Greenspan and Warren Buffet were bearers of gloom and doom. A recent Internet search for a saved article from Buffet shows that it is no longer available. Very interesting! As I write, the second quarter results – although weak like the first quarter – were positive, and we hear few harbingers of recession. By definition, a recession could not now begin until January 2009.
In April, our editorial focused on the potential harm to our economy (and our industry) of a Kyoto-type carbon-tax legislation. Like the steel-industry executives discussed above, you should also keep an eye on legislation that may affect your ability to do business as usual. We will break it down next month in our August Energy Summit editorial. Stay tuned.
An interesting outcome of the high steel raw-material costs may impact our coinage. Nickel and copper costs have increased so dramatically it now costs more than a penny to make a penny, and it costs 7.5 cents to make a nickel. Surprisingly, our lawmakers actually think this is a bad deal. As a result, some in Congress have encouraged using steel to make both pennies and nickels. If this occurs, steelmakers will have yet another demand for their material.
Interestingly, the climate legislation currently being proposed by Congress might make it impossible for steelmakers to make the steel needed for the coins being considered. If we don’t pay attention and maintain some type of reality check, China might be making, as well as taking, our money. IH