Steel price movement: what is its implication?

摘要

Steel prices continue to decline without any sign of picking up since the middle of 2008. Global demand continues to be sluggish. It seems like production cutbacks by many steel makers do not have a significant impact on the price movement yet, and further cutbacks may be required. The situation is still unclear. Reduction on raw material prices may improve producers' profitability to some extent. However, it may also lead buyers to believe that prices will continue to fall further. Raw material prices, particularly for scrap and spot iron ore, remained in downward trend through the first quarter of 2009. According to Australian miner, Territory Resources Ltd, benchmark contract iron ore prices are set to fall 30-35 percent from levels set last year, a reflection of lower demand amid the global recession.