Steel melts like ice in global meltdown

News was prepared under the information support of Online Daily Newspaper on Hellenic and international Shipping "Hellenic Shipping News".

31 Oct 2008

The global meltdown has hit the steel industry badly and the sector is reeling under pressure to cut prices due to lack of demand. The market crash has brought the construction sector to a grinding halt and that has hit the steel industry badly. As a result of the market collapse banks have stopped lending which has resulted in blocking construction work at almost every corner of the world. Naturally, steel industry will face a lack of demand due to this. So, this has forces the steel sector to go in for price cuts. Lack of demand and a softening global price scenario have led all large steel companies, including the largest steelmaker by capacity Tata Steel, to actively consider a price reduction in the range Rs 3,000- 4,000 per tonne.
The cut would be in the prices of the base category product such as hot rolled coils, which would subsequently be passed through in all value-added products like galvanised steel and cold rolled steel that are more widely used in consumer goods.
The current price of hot rolled coils is about Rs 37,000 per tonne, which after the reduction would come down to about Rs 34,000, narrowing the gap with international steel prices. The average price in European and US steel markets is currently in the range of $650 to $680 per tonne.
Other steel producers like JSW Steel, Essar Steel and Ispat Industries are also mulling price cuts.
It is not in India only, the steel sector is facing the problem.
In Latin America also, the scene is same. Even at the Latin American steel conference CEOs are avoiding media. They don’t want to discuss anything with the mediapersons as they are desperately trying to tide over the crisis.
According to a news agency report, company CEOs are canceling interviews with media as they have no answers to the questions posed by the media.
Many of the top CEOs also stayed away from the conference, fighting the crisis.

Source: Commodity Online