Reuters quoted Mr Heinz Jorg Fuhrmann CEO of German steelmaker Salzgitter as saying that European steel prices will be flat in fourth quarter this year and likely rise in the first quarter next year, if the economic situation doesn't worsen, as buyers will need to replenish inventories.
He told “I think steel prices will be stable. I don't see any further decline in the fourth quarter while in the first quarter next year, if there is no double-dip recession prices will rise.”
He informed that “We are not cutting liquid steel production just yet but we are constantly monitoring the production situation.”
Mr Bernhard Kleinermann Salzgitter head of corporate communication and investor relations said “People start to lower their inventories for accounting reasons but inventories remain very low if and the economy doesn't collapse they will have to restock in the first quarter next year.”
Salzgitter said “Carmakers and other major customers had not signaled any slow down in demand but many traders and other buyers were more cautious and trying to keep inventories low, especially before the end of the year.”
Salzgitter is still producing crude steel at full capacity of about 6 million tonnes but will curb steel strip production by about 180,000 tonnes in the second half this year, compared with what it previously planned. The steelmaker produced about 3 million tonnes of steel strip in 2010 and was planning to raise production to about 3.2 million tonnes this year, but given a weaker economic situation the planned increase will not take place.
Sourced from Reuters