Overcapacity stares in the face of steel-makers

It was as recently as the end of July that the head of the world’s largest steel-maker Lakshmi Mittal said that the steel industry would find a firm floor under prices and profits till at least 2011 on strong demand and supply constraints. At the time, everyone agreed with Mittal that the industry would continue to remain in a “strong and sustainable” position. When Mittal was talking, the US and south European markets had already started showing signs of falling demand. But such was his faith in emerging markets such as China and India that Mittal said, “I don’t see any major weakness in overall levels of demand.” The summer optimism has now given way to soul-searching as to where the steel prices are heading as the frightening US economic crisis is having a domino effect. What a summer it was – steel was selling at record... [read full story]