So we bitched and moaned about being dependent, even ‘addicted’ to foreign crude for decades. Then we did something about it by building our own empire of black gold, only to see it come crashing down into pieces within a few short years of having built it.
Now we’re seeing the ramification of building out an industry at historically high levels of pricing. There are ancillary victims, such the the steel industry.
Foreign steel coming into the U.S. dropped 36 percent in November from a year ago, according to U.S. Census Bureau data. That’s with domestic prices at the weakest in at least nine years and new taxes on products from six countries deemed to be unfairly priced. Yet U.S. mills have idled the most capacity since the financial crisis, operating at just 61 percent in the week ending Dec. 21.
Helping explain the capacity decline is a drop in demand for steel pipes and drill bits used in the energy industry after the price of oil plunged 66 percent in the past 18 months. Previously, sales of high-margin products to oil and gas companies had helped shield U.S. mills from sluggish growth in construction and other industries.
“I don’t think imports are the only problem,” domestic mills face, Timna Tanners, a New York-based analyst at Bank of America Corp., said in an interview Tuesday. “Nobody really expected oil to stay as low as it did as long as it has.”
Shares of X are down 69% for the year.
If you enjoy the content at iBankCoin, please follow us on Twitter
Where I live, the traffic is immense. I haven’t seen this level of tourists since 2005! Maybe the economy is better than we think. New homes are at record levels here. Commercial sales are also very impressive.
What region of the country is that?
I live just outside of downtown Chicago and can say that the area is experiencing a construction boom… nothing like 2005, but there are high-rises going up everywhere I look and large infrastructure projects throughout the city. Rents are at record highs here and people are happy to move in, so build it, I guess. Gravy boat, right?
The other part of me thinks that the construction industry is almost always a lagging indicator.
Interesting. The Seattle area is booming. But that may be because Northwest WA has water, while many other places are dry as a bone. The Northwest has so many clouds and so much water that people suffer from Seasonal Affective Disorder here, though no one admits it. It ties with Dallas for the 2nd highest suicide attempt rate of any city in the country. 1st is Salt Lake City. Those other 2 cities do not lack sun, so the people in them must be depressed due to some other factor.
In Seattle, the reason has to be lack of sun, because that’s really its only major problem. Otherwise it’s a nice city.
Dr. Fly – The Corbett Report did a huge piece this week on the rise of the oil lords. Might be a fun watch over the holiday. https://www.corbettreport.com/episode-310-rise-of-the-oiligarchs/