Some alternative sources on steel price / demand.
7 Oct - The World Steel Association (worldsteel) released its Short Range Outlook (SRO) for 2013 and 2014. worldsteel forecasts that global apparent steel use will increase by 3.1% to 1,475 Mt in 2013 following growth of 2.0% in 2012. In 2014, it is forecast that world steel demand will grow further by 3.3% and will reach 1,523 Mt.
Source:
http://www.worldsteel.org/media-centre/p...tlook.html
John Anton of IHS Global Insight provided a forecast earlier this week calling for HRC prices to rise into the 1st Quarter 2014.
The IHS Global Insight steel forecast calls for 2014 steel prices to rise by approximately 10 percent above the 2013 average “which will hurt your budget but not crush you.”
The elephant in the room is China which now controls 50 percent of the global steel market (and growing). Mr. Anton suggested during his talk that China has the ability to produce 960 million to 1.10 billion (with a “b”) metric tons of steel on an annualized basis. He told the group that China is currently on pace to produce approximately 800 million metric tons this year and price support levels in China are in balance with demand at approximately 680 to 700 million metric tons.
Anton’s forecast is based on China cutting production – something he thought would have happened earlier this year but to date has not. “The average profit per ton is less than a dollar. It’s less than a bowl of rice.” In the past the Chinese mills have reacted to poor domestic pricing by cutting production. With most of the mills making a loss and the Chinese economy growing at 7.5 percent rather than 10 percent or higher, Mr. Anton believes the Chinese mills will respond and shrink production.
IHS believes the reason the Chinese mills continue to operate and over-produce is not from government subsidies but rather through loans from the banking system. The bank loans being made are not being repaid and eventually will need to end. Once the loans dry up the mills will close the next day.
Source:
http://www.steelmarketupdate.com/modules...newsId=354
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