Steel prices should rebound by year end -Macquarie

Macquarie Securities Group in London believes steel prices should rebound...

Macquarie Securities Group in London believes steel prices should rebound by the end of 2009 from their massive decline during the recession, as Chinese demand picks up, Chinese exports slow and users in the United States and Europe resume buying. Steel’s longer-term outlook remains strong, said Jim Lennon, executive director at Macquarie, citing a slow rebuild of shuttered production capacity outside China relative to demand. Speaking this week at American Metal Market’s Steel Survival Strategies conference, Lennon forecast 2009 world steel demand at 1.214 million tonnes compared with 1.352 million tonnes consumed in 2008. Excluding China, demand should fall 19.9 percent this year to 702 million tonnes. Biggest user China, should consume far more steel this year than any other region at 511 million tonnes, a 7.6 percent jump above its 475 million tonne demand last year. China’s demand will be 25 to 30 million tonnes higher than actual consumption, because buyers have undergone a heavy inventory restocking after a deep destocking period last year.