Add weakness in industrial and agriculture machinery to the list of problems for steel producers.
Already hammered for the past year by falling oil prices that caused energy companies to cut demand for steel pipe, and record levels of cheap imports depressing prices, U.S. Steel Corp. and others are facing a slump in another key market.
Construction equipment maker Caterpillar Inc., tractor manufacturer Deere & Co. and mining machinery maker Joy Global are cutting production — which means the companies are buying less steel. Even Mack Trucks, the manufacturer of big rigs and other heavy-duty trucks, is laying off workers as it faces falling demand.
“Other than autos and appliances, the steel business is weak,” said John Tumazos, an analyst and owner of Tumazos Very Independent Research in Holmdel, N.J.
Oil isn't the only commodity experiencing price declines. Raw materials and minerals such as copper, coal and iron ore have plunged amid concerns about slowing growth in China, which once gobbled up those commodities to fuel a red-hot economy. Caterpillar and Joy Global, which have plants in Western Pennsylvania, have responded with layoffs in recent months as they reduce the amount of construction and mining machinery they produce.
At the same time, farmers are buying fewer combines and other machinery because their profits are being squeezed by weak grain prices.
Deere & Co. will lay off 220 workers early this year at a tractor plant in Illinois as it adjusts to falling sales.
“The layoffs reflect last week's forecast by Deere that agricultural machinery sales will decrease in fiscal year 2016,” the company said Nov. 30.
Source: http://timesofindia.indiatimes.com/