2013, the Difficult Period of The Global Steel Industry

Jefferies (Jefferies) from Investment Bank said in a report that this year's global steel industry starts with a tough tone opening. The steel market supply continues to exceed demand, resulting in iron and steel enterprises in low capacity utilization, weak pricing power and profits continued to thin. (steel chequered plate specification)

Jefferies said that this year the European steel consumption will decline by 1.5%, because of the recent events in Cyprus led to the European economic confidence weak, which may restrict end-user inventory rebuilding. Overseas demand for steel in Europe may also be affected by the recent appreciation of the euro against the dollar. Even a slight rise in demand for steel, crude steel production in Europe will be offset by the restart. Therefore, the European steel companies may require further cuts in order to balance supply and demand. Capacity utilization in the euro zone is still in low demand does not pick up substantially, you need to cut production again to restore the supply and demand fundamentals, and prompted to return to the steel mill profits or above the level of the cost of capital. Jefferies, referring to the ArcelorMittal steel mill in Belgium Liege (Liege) issues that the European steel mills try to cut production, but the process is too slow. Europe is likely to remain in the foreseeable future there is a structural excess supply problem.

EU and U.S. steel demand in the beginning of the second quarter was disappointing, which means relying on traditional seasonal factors pull up steel prices may not be realized. Jefferies pointed out, however, that U.S. prospects are better than Europe, but this year the U.S. steel consumption growth forecast from 4.9% down to 2.8%, because of sluggish steel spot market, the key industrial manufacturing was particularly weak. (feel free to contact us to get the latest steel chequer plate prices)

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Jefferies pointed out that China's steel industry has entered difficult times, steel demand growth slowed, but the new steel production capacity is increasing. This will lead to long-term, low profitability, forcing inefficient manufacturers out of the market, and in the long process of forming a more healthy industrial structure. China's crude steel output in the first quarter growth accelerated, an increase of more than 9 percent, to enter the second quarter of China's crude steel output growth does not seem to signs of slowing down.