On Oct 30, 2:12 am, "Ed Huntress" wrote:

Hmmm. I thought we were talking about competing with low wage
countries. And my point is that one can not compete with low wage
countries by doing things the same way they do.

Well, I think that's what I said in the beginning, isn't it? You can't go
head-to-head against businesses that pay $0.80/hour, I said. And Nucor
doesn't go head-to-head with low-wage steel producers. They have a niche,
which is making steel from scrap in electric-arc furnaces. The US produces
around 55% of its steel that way. China produces 13% of its steel that way.

But the US produces around 95 million metric tons of steel/year, while it
consumes about 125 m tons. Nucor has a niche in which it produces 20 m tons.
It's a large niche, but Nucor and all of the other secondary steel producers
in the US put together only produce less than 45% of the steel we use. Note
that remelted scrap is not of high enough quality for use in car bodies, for
example. They aren't really in that big-volume market, except at the lower
end of the quality scale.

--
Ed Huntress

I think we are pretty much in agreement. Got to be close if we are
using real facts. The only point I was trying to make is that we can
compete if we reduce the amount of labor so that it is insignificant.
And I agree with the embedded costs, but one has to also consider
shipping costs. So we can live with somewhat higher embedded costs as
they are offset by shipping costs. But we can not compete if we do
things the same way.

The only place where we differ much is that I do not consider Nucor as
operating in a Niche. While you say they are at the low end of the
quality scale, they probably don't agree. For instance they claim
that 10% of their sheet steel is used in automobiles including the
structure. They also sell cold drawn steel bars. As they keep
growing, they are competing more directly with companies that make
steel from ore.

Dan