Global economy and industry is craving for break from an unflagging onslaught of economic crisis. Steel industry weary of repetitive charge of the recessionary brigade has pinned aspirations on fortitude. Sympathy rather than empathy has become the byword when alien factors seem to set the tone of a beleaguered market.
Nostalgia has pleasant memories of an encouraging revival in 2010 after the 2008 devastation when the emerging economies (BRICS nations) particularly China and India remained at the vanguard of revival in steel demand led by surfeit in infrastructure and auto industry growth.
Brutally honest downgrading of US economy in the halo of a malignant European debt crisis trampled upon the revival. Recessionary pandemic afflicted China with US and Europe being its biggest trading partners.
Severity of the crippling in finished products bore an equally devastating backlash on the input material with iron ore, coke and scrap levels succumbing exponentially.
Objectively, any affirmation about revival in Q1 would be risky nonetheless it seems the market fundamentals might just have troughed. US economy is looking up with growth in production and demand. European supply chain might be just eager to replenish and the MENA nations on the verge of reconstruction would provide fillip. Chinese industry might be looking for an easing of lending rates as inflations stagnates along with infrastructure growth. At the same time MoM decline in crude steel production since September has taken a toll of inventory.
Any sustainable flight in demand and growth is feasible with a quick and durable resolution of the European crisis which has literally held the global economy to ransom in H2. Even though economic powerhouses of France and Germany have been trying to reach a long standing structural changes to enliven the economy a protracted negotiations is doing little to kick start revival of global market sentiments.
Q1 is definitely succulent with meager positivism rather than a magic wand. However a resounding revival is a function of the urgency, farsightedness and prudence of the developed nations.
(Sourced from www.steelprices-india.com)
