Newsletter 37-February 2009

"Keeping you Informed"

Prices

(1st Jan 06 = 100 units)

                        From 1st Feb (1st Jan) Last 12 months

                                     2009  (2009)    High           Low

Merchant Bar                 144  (134)      215 (07/08) 131 (02/08)

(Rounds, Flats, Angles etc)                      

Heavy sections              165  (172)     212 (08/08) 157 (02/08)

(Beams, Columns etc)                              

Hollow Sections             137  (154)     205 (08/08) 127 (02/08)  

(Box, Tubes etc)                                     

Prices

There has been some confusion over prices following Corus's announcement of 3500 redundancies due to the economic recession and prices have dropped by 50%. Up to date figures are stated above and the drop in merchant bar prices since July 08 is 33%, heavy sections down 23% and hollow sections down by 33%. Our figures are based on our standard selling prices that we adjust and review monthly so that we can remain competitive and we hope they will help you understand how the steel market prices fluctuate.

As far as future prices are concerned we expect the recent increase in merchant bar prices to come under pressure, the heavy section prices are very difficult to predict with some major producers trying to maintain current levels and some smaller ones cutting prices to keep stocks moving, we are watching these closely. Hollow section prices have reached a plateaux and we expect a couple of months stability.

Supply

The reduction in capacity and the uncertainty re prices has made steel mills reluctant to quote. Although demand is low we see some potential shortages (eg recently on 50x50x5/6 angles). If we need the steel we are ordering it so we can maintain our complete customer service.

Demand
Not as bad as we had thought, but as we can only see up to 5 days ahead at any time, we cannot guarantee this level to continue.

Credit

Still very tight and we are working overtime to maintain insurance cover on our customers. The insurance companies are very nervous of all risks because of the current economic recession. Please do not be offended if we ask for up to date management figures as this is what we are being asked to provide by our insurers. If you have any problems please contact Melinda Bruce who is here to help.

Tomrods Limited

Since our December review yours truly became a Granddad to a little boy - Alexander and I am getting used to becoming a member of the older generation.

Thank you for reading this and if you have any comments about Tomrods Ltd or our website please email the undersigned at johnt@tomrods.co.uk

John Thompson
Managing Director -