In consonance with the economic undulations prevalent in much of the developed world the steel market has been playing second fiddle. With whole of 2012 washed off in guess work about turnaround in the economic crisis in Europe and USA casting its halo over the steel market 2013 seems precarious clinging on hopes of certain economic challenges falling in place.
Fiscal cliff being the immediate sword hanging over the global economy it avoidance will be critical for revival of economy in USA and Europe. Thereupon repeated threat of debt trap for PIGS nations in EU 27 has barely receded but its effective and magnanimous handling by ECB and Germany would kindle revival.
As USA and Europe grapple with managing these challenges one tends to be optimistic as the compulsions are overbearing.
Steel market has been languishing in the shadow of economic crisis. Even though USA market has shown glimmer of revival propped by aggressive anti-dumping measures, state avocation of infrastructure spending and pick up in housing sector.
Europe on the flip side remains slippery with some half hearted measures by steel mills to force price hike. Undeniably the inventory levels in the supply chain are low but so is the demand.
European flat steel prices will remain ascendant in the twilight of 2012. Demand is expected to increase in January on re-stocking and speculative buying to avoid further rise. To some extant flat products prices Ilva closure would keep the market buoyant in the short term.
However the mills may have to indulge in production cut in the medium term to keep maintain price level. Relatively stable Euro augur well for imports but upturn in export offer from main China and Russia will also assist the domestic mills to some extant in fostering their prospects.
