Happy New Year
2011 will hopefully bring better tidings across the steel supply chain. The recession wounds are still healing and last thing we need is another jolt. Overall our assessment outlook for steel for the year is moderate. The international prices may go up in the short run especially at the time of the year when the jostling for prices begins. A couple of months of supply tightness is expected as mills try to get their prices and buyers hold back their purchases.
Europe along with USA remain a worry with the growth no where in sight and some economies still struggling. Turkey seems to be the bright spot since it considers itself part of Europe. However perhaps its links with Asia more particularly the Middle East that is giving it the growth impetus along with its young population and sound economic policies.
The emerging markets are holding up nicely although India has some concerns on its Current Account deficit. Brazil seems to be doing well but the new Government will need to match the charisma of its former President Lula. China is the unknown. Will its property boom continue through the year? I Africa should continue growing. So will Middle East as they continue to broad base their economies from petroleum to feed the aspiration of their booming populations.
Local mills across the globe have ramped up their productions. So international trade would be more freight driven and perhaps regional. Free Trade Agreements will continue playing a role due to duty advantage. China will continue being a factor in International trade with its continued over capacity. But according to us it will lessen due to a combination of rising cost of production, appreciation of yuan and reducing Government subsidies.
So outlook is not gloom but it is also not a time to celebrate. It is a time to continue keeping our heads down and staying focussed on the long run.