As reported by atradius, the World Steel Association (WSA) last year predicted a 4,5% growth in the global steel industry this year. Now the WSA itself had to revise its forecasts to just 2,9%, given the developments in the Euro Area and the level of demand in key markets such as China. In fact, we are witnessing a constant drop in demand, not only in China but in many other markets, with consequent overcapacity and falling prices as producers try to get rid of their unused stock. This happened for example in the USA, where extremely aggressive competition fueled by a shortage of projects has led to a drop in market prices, fueled by the uncertain situation facing the state budget. In Japan, the contraction of the automotive and shipbuilding sectors has put a strain on the steel sector. L'Australia, for its part, has its own set of problems, with the contribution of the extractive sector to the national economy declining.
But there are some more positive signals that come from Turkey, where the metal industry is experiencing momentum, fueled by the success of related industries that depend on the supply of steel products. And if you look to the future, according to atradius it can however be said that the leading producers of the sector, from Russia to the USA, are financially healthy enough to be able to overcome this difficult phase, both thanks to its capital strength and through mergers and acquisitions.
