Steel: A Global Strategic Business Report
San Jose, CA (Vocus) October 27, 2010
The financial crisis led world economic slowdown has pushed the steel industry into recession. This is primarily because steel represents a strategic component in every country’s economic development, as it is a critical necessity for infrastructural growth and is a vital component in the manufacturing value chain. With demand for steel coming from end-use markets, which are closely tied to the health of the economy, such as, construction, automotive and machinery, steel consumption took a major hit in the years 2008 and 2009.
Meltdown of the construction and automotive end-use industries, and reduced contribution of manufacturing activities towards a country’s overall GDP, have especially exerted immense pressure on international consumption patterns. Marked declines in production of cars, consumer goods and heavy machinery triggered by market distortions such as, rising unemployment levels, falling consumer income, wealth, discretionary spends, crumbling consumer & business confidence, dearth of capital availability, corporate budget cuts, among others, eroded per capita consumption of steel. Cancellation of supply orders, inventory buildup, production slowdown, plant idling and abandonment or cancellation of new capacity expansion projects, characterized the steel market during this period of stressed economic climate. Bankruptcies, financial woes, and government takeovers were rampant as a result of poor volume demand, reduced prices, and high cost of procuring raw materials. Despite the erosion in consumption patterns, the overall rate of decline has been lesser in magnitude in comparison with earlier recorded periods of economic crisis and recession. This is primarily because of the massive levels of decoupling between the developed and developing countries despite the trade and financial chains that run through all regional markets. For instance, while developed countries sank into double-dip recession, steel consumption patterns were largely upheld during the 2007-2009 crisis by the relatively superior performance of the developing countries, such as, the Chinese steel industry, which, in terms of relative comparison, withstood the pressures of the sputtering world economy.
A recovery in global demand for steel products in 2010 is seen as imminent, although the timing and strength of the resurgence will tend to vary across regional markets. The expected recovery will be led by Asia, and will be triggered by factors such as, economic stimulus plans implemented and enforced by governments across the world, improvements in manufacturing activity, general improvement in global trading conditions, and rebound in infrastructure spends, among others. Additionally, steel prices in the world market are forecast to recover from the lows experienced in the years 2008 and 2009. With production levels continuing to hover below the pre-crisis levels, prices are forecast to rally up and rise in the coming months. Despite being pummeled by falling demand from automobile and construction end-use markets, leading steel producers are contemplating price hikes as a result of rising raw material costs
As stated by the new market research report on world steel market, Asia-Pacific and Europe account for a major share of the global demand. In terms of end-use application, construction sector represents the largest end-use application market for steel. Decline in new housing starts, cancellation of new construction projects such as malls, apartments and roads, reduced consumer spends on renovation, among others, impacted demand in this sector. However, the sturdy infrastructure and construction business in China, in particular, will play a key role in stimulating demand for steel in the upcoming years, thus benefiting exporters such as Brazil, Australia, Canada and Africa. Steel demand in automotive industry, which was the most acutely hit as a result of steep declines in passenger car sales, is expected to post a steady recovery in the upcoming years, driven by significant growth in developing automotive markets like China. As the new economy emerges from the current recession, automotive applications are forecast to recover poise with the growing focus and preference for efficiency, comfort, style, safety, functional elegance and flexible architecture promising healthy demand for high-end steel with innovative properties, characteristics relevant to automotive requirements, such as, ultrahigh carbon steel.
Key players in the marketplace include Anshan Iron & Steel, ArcelorMittal, Baoshan Iron & Steel Co., Ltd, Evraz Group S.A., Gerdau S.A., Hebei Iron and Steel Group, JFE Steel Corporation, Jiangsu Shagang Group Co., Ltd., Nippon Steel Corporation, Nucor Corporation, Pohang Iron & Steel Co., Ltd. (POSCO), Riva Group, Tata Steel Ltd., Corus Group Plc, ThyssenKrupp Steel AG, and United States Steel Corporation.
The research report titled “Steel: A Global Strategic Business Report” announced by Global Industry Analysts, Inc., provides a comprehensive review of market trends, drivers, product overview, competition, product introductions/innovations, and recent industry activity. The report offers market estimates and projections in volume sales for regions such as United States, Canada, Japan, Europe, Asia-Pacific, Middle East, Latin America, and Africa. Key end-use segments analyzed include Construction, Automotive, Machinery, and Other Domestic/Commercial Equipment, among others.
For more details about this comprehensive market research report, please visit –
About Global Industry Analysts, Inc.
Global Industry Analysts, Inc., (GIA) is a reputed publisher of off-the-shelf market research. Founded in 1987, the company is globally recognized as one of the world’s largest market research publishers. The company employs over 800 people worldwide and publishes more than 1200 full-scale research reports each year. Additionally, the company also offers thousands of smaller research products including company reports, market trend reports, and industry reports encompassing all major industries worldwide.
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