The widening cascade of financial scandals dousing the corporate sector could not have come at a worse time for a recovery in steel demand. A sustained revival requires higher consumer spending on big items and a revival in corporate real investment (as distinct from the Enron kind). Repercussions of the scandals on share values are making consumers feel poorer and act cautiously. At the corporate level, if companies are prepared to take the risk of major investments, neither banks nor stock exchanges will be in a hurry to fund them. The full effects on the real economy of events in the financial economy (now looking less and less real) may not be visible in the seasonally quiet weeks ahead, but apprehensive service centre managers will already be planning dc-stocking tactics.
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