It’s a difficult time for the steel industry. Prices have been on something of a downward spiral for some time with a major decline being experienced across the market, and a lot of steelmakers have reported dramatic losses over the last year. Severstal, one of the “big four” Russian steelmakers, reported a $150m loss in the period Oct-Dec 2012 whilst UK-based Tata suffered a £50m loss in the same quarter, with this truly being a global concern.
The main reasons behind this level of decline seem to be a lack of demand combined with a stark imbalance between the price of the raw materials and the sale price of steel itself. These were both key problems throughout 2012 which understandably made it difficult to reap the profits, and according to market analysts they could continue to be an issue for the foreseeable future. Although many steelmakers are hoping for a return to form with conditions starting to ease somewhat, it isn’t yet clear how much of an improvement will be possible.
The commercial environment continues to be difficult for steel producers and the next few months will be crucial, but staying on top of these market fluctuations is vital if you want to make sound business decisions. Expert analysts should always be consulted to ensure sufficient understanding of the area, helping you through this period of uncertainty so no costly mistakes are made. Wider economic conditions will always have an impact but, hopefully, steel prices will return to something resembling normality in the future.
