There may not be any prophet who can make such a prediction that the steel industry, the world's "heavyweight" industry carrier, after experiencing continuous advances for six consecutive years, will be in full swing at the end of July 2008.
Even at the opening ceremony of the World Steel Congress, leading figures such as Lakshmi Mittal are still convinced that demand from emerging markets will be “safeguarded†by the high price of steel prices.
However, this time we are not facing a general cyclical recession. The sudden financial tsunami and credit crisis have caused unprecedented impact on all metals and minerals industries. Global steel companies can not help but sigh in the storm: Where are the roads? One of the key questions is: What is the overall industry downturn? When will it end?
The 2008 global steel production data is still in the process of consolidation. However, it is obvious that steel production in the past year will be slightly lower than the 1.0324 billion tons in 2007. ArcelorMittal, Corus and other industrial giants have experienced significant production cuts. As the world’s largest steel producer and consumer country, China has also participated in this unprecedented production cut.
Observers expect that global steel production in 2009 will fall by 10% (Credit Suisse) to 13.9% (World Steel Dynamics). “Even if production fell by only 10% in 2009, we would also experience the largest decline in annual production of the global steel industry in history.†said Sushil Roongta, chairman of SAIL.
For SAIL, they also adopted a series of targeted measures, including product structure adjustment, negotiation and discussion of customer issues. Since World War II, the company experienced the largest annual decline of 8.7% in 1982.
Thanks to at least 6% of GDP growth in India, SAIL’s suffering in the overall reduction in production has been alleviated. On the other hand, the company's flexibility in countermeasures also kept their product demand still good. However, neither SAIL nor other Indian steel companies could hold their steel price front. The average price of steel fell from US$1,160/ton in July 2008 to the current level of US$500 to US$550/ton.
Looking ahead to 2009, before the world economy picks up, steel companies will continue to huddle in order to cope with the long-term decline in demand and get ready for the recovery of global steel production as early as 2007 level or even higher. Now, experts have debated whether it takes 3, 4, or 5 years for global steel production to recover to 10.324 billion tons. One of the most pessimistic forecasts came from Moody's analysts, who believe that the current slump will continue until 2013.
According to data from the Iron and Steel Statistics Bureau in London, analyst Peter Marsh of the Financial Times said: “Since 1991, this type of situation has only occurred four times.†That is, the world steel industry has used 4 Years or longer, they came out of the downturn and climbed to the previous high point of production.
Recognizing that the decline in steel demand and prices was the product of the worst economic crisis since the Great Depression, industry insiders may not be constrained by some intermittent slight rebounds in metal prices. Some analysts do see the possibility of a slight rebound in steel prices in the second and third quarters of 2009, but they are not sure that this kind of recovery will be sustained.
Even at the opening ceremony of the World Steel Congress, leading figures such as Lakshmi Mittal are still convinced that demand from emerging markets will be “safeguarded†by the high price of steel prices.
However, this time we are not facing a general cyclical recession. The sudden financial tsunami and credit crisis have caused unprecedented impact on all metals and minerals industries. Global steel companies can not help but sigh in the storm: Where are the roads? One of the key questions is: What is the overall industry downturn? When will it end?
The 2008 global steel production data is still in the process of consolidation. However, it is obvious that steel production in the past year will be slightly lower than the 1.0324 billion tons in 2007. ArcelorMittal, Corus and other industrial giants have experienced significant production cuts. As the world’s largest steel producer and consumer country, China has also participated in this unprecedented production cut.
Observers expect that global steel production in 2009 will fall by 10% (Credit Suisse) to 13.9% (World Steel Dynamics). “Even if production fell by only 10% in 2009, we would also experience the largest decline in annual production of the global steel industry in history.†said Sushil Roongta, chairman of SAIL.
For SAIL, they also adopted a series of targeted measures, including product structure adjustment, negotiation and discussion of customer issues. Since World War II, the company experienced the largest annual decline of 8.7% in 1982.
Thanks to at least 6% of GDP growth in India, SAIL’s suffering in the overall reduction in production has been alleviated. On the other hand, the company's flexibility in countermeasures also kept their product demand still good. However, neither SAIL nor other Indian steel companies could hold their steel price front. The average price of steel fell from US$1,160/ton in July 2008 to the current level of US$500 to US$550/ton.
Looking ahead to 2009, before the world economy picks up, steel companies will continue to huddle in order to cope with the long-term decline in demand and get ready for the recovery of global steel production as early as 2007 level or even higher. Now, experts have debated whether it takes 3, 4, or 5 years for global steel production to recover to 10.324 billion tons. One of the most pessimistic forecasts came from Moody's analysts, who believe that the current slump will continue until 2013.
According to data from the Iron and Steel Statistics Bureau in London, analyst Peter Marsh of the Financial Times said: “Since 1991, this type of situation has only occurred four times.†That is, the world steel industry has used 4 Years or longer, they came out of the downturn and climbed to the previous high point of production.
Recognizing that the decline in steel demand and prices was the product of the worst economic crisis since the Great Depression, industry insiders may not be constrained by some intermittent slight rebounds in metal prices. Some analysts do see the possibility of a slight rebound in steel prices in the second and third quarters of 2009, but they are not sure that this kind of recovery will be sustained.
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