subject: Prices Peak But The Steel Industry Is Finally Looking Up [print this page] When prices on steel peaked the summer of 09' we are now beginning to see prices on steel products such as carriage bolts decline, which is a simple indication that the recent increase in the production of steel has finally caught up to demand.
Manufacturers of steel and carriage bolts have a hold on several key markets, which ranges from the individual consumer to the industrial consumer, which is an indication that the economy is on a strong rebound.
The Chinese Government along with the United States has come out with aggressive stimulus packages. Manufacturers of steel, carriage bolts and a wide variety of nuts and bolts took the opportunity to increase production and bring inventory to what it once was. One of China's largest steel manufacturers began an increase in production of steel to meet the rising demand of auto sales and other demands from consumers from July 2008.
The surprisingly quick rebound of decreasing prices after an anticipated quick upturn gives us a look into the weak stature of the economic situation of the whole world. Some markets in several countries showing strength while the majority of markets are showing signs of being weak and seemingly flimsy economies.
The speedy rebound from dropping prices gives us valuable information that can aid steel manufacturers analyze whether this information shows an actual demand in the market or if consumers and car makers are just stocking up while prices are cheap for steel, nuts and bolts, and carriage bolts.
The CEO of a steel manufacturer in Germany that is known for producing steel for the United States and European countries questions that there may not be real demand for steel, and this may be a smoke screen that they must look through to make sure that steel consumers are not just stocking up for the coming months. Germany based steel producer that is known for selling and steel production in Europe and North America.
Although the demand for steel is looking like it will rise for the second half of '09, we would like to warn those manufacturers of steel that they need to analyze the market for false demand tendencies.
Looking at the past months we have seen some consumers see steel manufacturers increase prices with no apparent reason to do so, but some consumers are wondering that if the manufacturers have no real reason to raise prices, the question stands in many minds whether the increased prices will stay for a prolonged period of time. Steel manufacturers are staying quiet in hopes that they can turn a positive profit in the year of '09.
Historically when the economy takes a turn for the worse steel manufacturers have reacted by dumping inventory before the prices on steel tanked. Some steel producers have dropped production almost completely early in the year of '09, while other manufacturers were forced to drop steel production completely and lay off staff. It is clear that some steel producers took far too drastic of measures; however steel manufacturers in the United States have begun to increase steel production in the 3rd and 4th quarters.
