The Wall Street Journal published an article on January 7th 2009 talks about recent efforts of steel producers around the world to open up select mills, in a sign that the market for steel may have bottomed. From their mid 2008 highs, steel and iron ore prices have slipped 40% as a weakening global economy and financial crisis has slowed demand for cars, houses and other durable goods.

However, there are many factors that suggest that this commodity, so heavily correlated to economic activity, may have bottomed and may gain steam in 2009.

WSJ also reports that producers have been opening mills back up selectively, and although this suggests the start to a revitalizing market, in the near term it is probably a function of lower supplies rather than a pickup in demand. Editors note new steel mills still are coming on stream and the industry are cooping with a tremendous oversupply that would be present even if consumption bounced back.

WSJ said that 'Many steel mills have during the past 48 month since the last steel crises been on acquisition binge and adding capacity that are now simultaneously coming on stream. A more realistic assessment is that steel prices will remain in doldrums for quite a while even after the general economy improves."

(Sourced from www.wireworld.com)