May 2012 | Steel Tracker
Chinese overproduction continues: Latest Analysis
Steel buyer confidence falls further as euro crisis worsens.
In the USA, the recent bankruptcy filing from RG Steel highlights the agony of high costs and inadequate prices that coil mills have been enduring. Coil demand, manufacturing led, is picking up, plate orders are still riding on strong energy markets and even house-building is showing signs of life. However, utilisation rates of 80% and rising imports provide more supply than the market will bear, so prices continue to sink. The seemingly unending eurozone sovereign debt crisis and the self-defeating austerity programmes it has generated have robbed steel markets of confidence. Steelmakers can hope that demand will be only slightly lower than in 2011, and that as a result of production cuts, prices are not declining as fast as might be expected as the seasonally weak midyear months approach. They can be thankful that the declining value of the euro and caution among traders are keeping imports low. Chinese steelmakers...
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