January 2012 | Steel Raw Materials
An outlook on steelmaking capital expenditure in 2012
The market volatility and macroeconomic shocks seen throughout 2011 have dramatically shifted the steel industry’s landscape. We have found that the changing market conditions have forced a large majority of steel producers to re-evaluate projects that are currently in the pipeline or postpone major undertakings.
Uncertain times
The market volatility and macroeconomic shocks seen throughout 2011 have dramatically shifted the steel industry’s landscape. Although 2011 started off better than expected, the cracks soon began to show. Credit constraints, volatile equity markets and political instability around the world prompted many investors to adopt a risk off attitude. This bearish market sentiment slowly crept into the minds of steel makers, buyers and traders, pushing most to the sidelines and catching many others off guard.
Producers were slow to react during H2 2011 as demand largely dropped off in the wake of the Arab Spring and the eurozone and US debt crises. As a result the fundamental balance was pushed further off...
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