The steel industry in the 10 years of the most severe recession which may be 1991 - the same as 92 years of miserable
"The steel industry in the 10 years of the most severe recession which may be 1991 - the same as 92 years of miserable," VTBCapital WiktorBielski global head of commodities research, said. "Now almost no one spared. At the current price, the entire global industry to make money less than 50%."
Consulting company CRU, said the steel industry 2.3 billion tons of production capacity, there are 700 million tons, "idle" to the need to cut 4-5 one hundred million tons in 2020 to let the market back into balance.
Almost no one believes such cuts can be achieved, especially since an estimated 300 million tons of idle capacity in China, employing hundreds of millions, if reduced size of the industry may cause unrest.
An official of the China Iron and Steel Industry Association, which is the market rule. Not China, that is, India, Russia or Turkey steel mills, more competitive producers will phase out high-cost manufacturers in developed economies.
China Iron and Steel Association expects China's steel exports this year will be over 100 million tons last year, steel exports soared 50 percent to 9,400 tonnes. Flood of cheap Chinese steel has led to the global steel prices ST-CRU-IDX to 11-year lows.
** ** The most efficient steel plant
"In the past few weeks, global steel prices fell by more than the price of iron ore. China's steel exports to southern Europe, the price of 300 euros per ton, far below the EU's most efficient steel plant production costs," Austria VAI CEO Group WolfgangEder said.
But nearly a month later, but no new trade protectionist measures of the announcement. Many experts believe that these measures would be counterproductive in the long run, because they exacerbate the overcapacity situation.
"Under the rules of World Trade Organization (WTO) as far as possible without artificial constraints of the market is the best market," World Steel Association (WSA) Director General EdwinBasson said.
However, trade protectionism is quite popular, and political and labor organizations also exert a lot of pressure to steel prices, forcing steel mills continue to operate, this situation not only in China, ArcelorMittal has also been experienced in 2012. The company was trying to shut down its blast furnace in France, but the threat of nationalization.
On the other hand, global steel demand is still sluggish. Consulting firm CRU expects steel demand to fall by 3%, to a certain extent due to the consumption of steel in China half of the world economic slowdown. The agency expects 2015--2019 steel demand will be 2% CAGR.
"(Steel industry) require large-scale restructuring, or demand picks up," MEPS said analyst JeremyPlatt