What's in store for the gas-cylinder industry?

摘要

The rising cost of steel will continue to challenge gas-cylinder businesses. Manufacturing production is on the rise, which spells greater business for companies supplying steel industrial-gas cylinders for weld-g and other applications. But these companies are also faced with an unprecedented spike in the cost of steel and low availability, both of which drive up their product costs and eat into profit margins. To stay competitive in this environment, companies must understand and factor in the market forces that will impact their future costs. The price of hot-rolled steel sheet in the Midwest rose from just under 300 dollarset ton in September 2003 to just over 700 dollarset ton in August 2004. And experts are predicting further increases. For example, they forecast the annual average price for hot-rolled sheet, used in acetylene and industrial gas cylinder production, will rise 78 percent in 2004, versus the 2003 price. Worldwide, there's a high demand for steel but a short supply, which is controlled by a select group of companies. Domestic consumption of steel is about 120 million ton, outpacing domestic capacity at 106 million ton. This imbalance results from industry consolidation and the lack of available scrap steel and coke.