http://www.nerdsofsteel.com/2009/02/23/world-crude-steel-output-up-5-in-january/ Industrial revolutionaries at work Fri, 18 Feb 2011 12:51:48 +0000 hourly 1 http://wordpress.org/?v=3.3.1 http://www.nerdsofsteel.com/2009/02/23/world-crude-steel-output-up-5-in-january/comment-page-1/#comment-143 Niraj Fri, 27 Feb 2009 07:05:02 +0000 http://www.nerdsofsteel.com/?p=771#comment-143 I think world crude outpur of 5% in Jan 09 was not demand driven but hope driven and so in Feb and March we are going to actually see decline. Steel industry is not going to get out of woods unless China cuts capacity and production by more than 40% which looks unlikely as of now. The other major worry is that China had built up this capacity as it was growing at 11+% GDP growth in last decade which for next 3 years looks highly unlikely. This is further going to reduce its internal consumption releasing more steel into international market further depressing prices and throwing industry in bigger turmoil. My personal view is that China should permanently dismantle 40% of its capacity of 600 mt and should not allow any capex for next 5 years. Only this will put steel industry on a road to recovery and give long term stability to the industry and environment. I think world crude outpur of 5% in Jan 09 was not demand driven but hope driven and so in Feb and March we are going to actually see decline. Steel industry is not going to get out of woods unless China cuts capacity and production by more than 40% which looks unlikely as of now. The other major worry is that China had built up this capacity as it was growing at 11+% GDP growth in last decade which for next 3 years looks highly unlikely. This is further going to reduce its internal consumption releasing more steel into international market further depressing prices and throwing industry in bigger turmoil. My personal view is that China should permanently dismantle 40% of its capacity of 600 mt and should not allow any capex for next 5 years. Only this will put steel industry on a road to recovery and give long term stability to the industry and environment.

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