Steel production & price cuts
Background:
- Aug 1 - Steel production, consumption & price trends
- Sept 18 - Steel Stocks & Prices - Mittal vs Market
- Sept 25- Steel prices - Anyone feeling bullish yet?
- Oct 3 - Steel stocks - Cramer disses them too!
A complete turn-around in 4 months: ArcelorMittal to cut 30% output
ARCELORMITTAL, the world’s largest steelmaker, reported on Wednesday profits rose 29 per cent in the third quarter but said it would cut output by nearly a third as a sharp economic slowdown dampens demand for the steel used in houses and cars.Warning of tougher times ahead, ArcelorMittal said it needed to ‘rebalance supply and demand’, putting on hold an ambitious expansion plan that would have increased steel shipments by a fifth by 2010.
India steel makers have also (finally) gotten the market’s message: SAIL, Tata Steel stay put, others cut output
While JSW Steel has said it would cut output by 20% from November, Ispat Industries will slash 15%. Essar Steel said it’s looking at ‘rationalising’ production, while Bhushan Steel Ltd will chop galvanised steel output by 20-30%.
JSW Steel’s new 3-mtpa blast furnace in Vijayanagar, which was to kick off in October, has been delayed by two months.
These guys were planning to hike steel prices only a couple of months ago. Badly in need of a reality check.
The last hope for steel makets remains infrastructure. But with China & ME/GCC beginning to bust, and Indian infrastructure projects bound to get delayed, I doubt there’s much hope there. But we’ll have to wait for a few more months before steel (and cement) manufacturers accept that as well.
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