Metalico Inc. (AMEX:MEA), Olympic Steel Inc. (Nasdaq:ZEUS), Steel Dynamics Inc. (Nasdaq:STLD) all soared with the broader commodity sector Thursday, as the fact the Federal Reserve was going to inflate again via its quantitative easing strategy pushed up the price of commodities in anticipation of the inevitable inflation to come.
Commodity prices increasing included aluminum, gold, silver and oil. Gold prices soared record levels again, reaching toward the $1,400 an ounce level. Silver moved past the $26 level, and is probably going to continue moving up.
The steel industry could go through seasons of swings as currencies respond to the drop in value of the U.S. dollar, which will affect margins because of the wide swings in currency value and the battle by some against the Chinese renminbi, which they'll be forced to take defensive measures against.
Because of market factors, and the overall economic health of the steel industry in general, it probably won't partake in the surge in commodity prices and demand as other raw materials will surely do.
Metalico Inc. closed at $4.54 Thursday, rising $0.17, or 3.39 percent. Olympic Steel Inc surged to close at $24.03, gaining $1.59, or 7.09 percent. Steel Dynamics Inc. was up to $15.73 at the end of the trading session, gaining $0.49, or 3.22 percent.
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