Still ugly for steel and iron ore; but stay alert.
Recent steel and iron ore industry headlines this week are not promising for a segment of China's economy that's especially bogged down by overcapacity and slower growth:
- Worldsteel flags end to fast China steel demand growth
- Malaise in steel sector to stay until mid 2013 -Stemcor
- Japan Q4 crude steel demand seen down 0.2 pct y/r
- Mittal CEO open to selling idled French furnaces-report
Certainly the pressure is on. China's largest steel company, Boashan Iron & Steel Co., is idling a plant in Shanghai that produces 3 million tons of steel per year. (Pressure is being felt in Europe too. And Japan's Nippon Steel and Sumitomo are considering additional cuts to their operations. And don't forget the myriad problems Australia's Fortescue is experiencing due to these very same forces.)
We've talked about the ongoing sluggishness in China and the global steel industry. And we tend to think "price majeure" will keep the pressure on companies. But ...
Market Vitals | 02 October 2012 [http://blackswantrading.squarespace.com/storage/market-vitals/100212_mv_china_steel.pdf] ~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
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