Despite the cold and blizzards natty is only up 4 cents at $3.38.
From the Wall Street Journal's Heard on the Street column:
Kafkaesque Twist in U.S.-Europe Energy Gap
The synopsis of a Franz Kafka story written for a European industrialist might go something like this:
Steelmaker from the Alpine valleys forgoes investment at home, instead traveling thousands of miles to build a factory in North America. There, he mixes natural gas and iron ore before shipping the resulting product all the way back to Europe to make steel. And it will still be cheaper to do all this than just do it all at home. The end.This is probably one reason that Arcelor Mittal, the world's largest steelmaker wasn't too scared when French industrial recovery minister Arnaud Montebourg said “We do not want Mittal in France any longer because they do not respect France,” last November.
For Europe, this convoluted nightmare isn't fiction. Voestalpine, an Austrian steelmaker, plans to invest €500 million ($659 million) in a new facility in the U.S. or Canada. The plant will use natural gas to produce "hot briquetted iron" to be sent back to Europe to then process into steel. This method is an alternative to the traditional one using metallurgical coal.
Voestalpine, facing a dire economic situation in Europe, is trying to cut costs by taking advantage of cheap North American gas. U.S. gas trades at about $3.50 per million British thermal units, a third of what it costs in Europe, according to the company.
Voestalpine's decision is a smart one, but it highlights the competitive disadvantage opening up between North America and Europe on energy costs.
There are other, less obvious losers, too. Gazprom, which has long relied on Europe's lack of options to charge high prices for Russian gas but now faces increasing competition, is one. America's coal miners are another. They have already seen thermal coal lose market share to cheap—and cleaner—natural gas in power generation. Now metallurgical coal is increasingly under threat....MORE