Posted on 08 Oct 2008
Steel Market is being stumbled once again
The global key steel exporter, China, arranged to reduce the rates. The decline hasn't been important until now, only 5 percent, however the metal producers of Russia will as well lower the price of their merchandise in the fourth quarter. Most forecasters state the reduction is of seasonal nature and the costs will max out in 2009, rather a couple consider that the utmost has been passed this year and the steel costs will be flaking from this moment and on.
One of the world steel best, Baosteel, will curtail rates by $29.24/ton to $43.86/ton on standard in October. The known reasons diverge from the decline in the iron ore rates that China imports from India to the decrease in local request. A ton of hot-rolled steel is charged at $870/ton in July in China.
China is one of main exporters of steel and its costs exactly disturb the costs globally. Therefore, the cutback in steel rate, which, under the Deutsche Bank approximation, accelerated by 140 percent from 2004, could be observed as the commencing of a descending fad.
The predictions of specialist vary. Steel production is a seasonal business with prices declining from year to year in the fourth quarter, stated Olga Okuneva, who is the metal analyst at Deutche Bank. I don't think the peak of steel prices has been passed. Prices for steel and rolled metal will be higher in 2009 than in 2008, predicting steadiness following 2009.
However the analysts of Lehman Brothers are not so positive, prognostic the 5-percent reduction in steel and rolled metal rates in 2009. There might be anticipation that China will call off or reduce the taxes on steel merchandise export because of the general increase of production. Meanwhile, the financial system in Europe and the United States is prognostic to decelerate. The outcome of this blend might be the equilibrium of request and stock on the market.
