Reuters reported that steel producers were too quick to restart idled capacity as demand remains weak and increased supply is putting downward pressure on steel prices. Mr Mel Wilde chairman of UK based International Steel Trade Association said that "Producers around the world very quickly ramped up their production over feeding the market."
Mr Wilde's comments came after the chairman of the world's top steel producer ArcelorMittal braced to say that he believes US and European steel markets will not return to pre crisis levels next year.
He said that "There is not enough discipline overall from the producers to allow sustainable price increases or stability because everybody's desperate to get more cash flow. As they see the price in the world market above their production cost they start to meet the demand, or the perceived demand, with too much steel and bring the price down again. The most recent example is China. They met the demand that was out there with one month's production very quickly and killed the demand."
Mr Wilde agreed that orders have increased, but said the pace of the response was too much. He said that "Lack of discipline is leading to an un sustained recovery and I think it's going to be like that until the end of the year and into next year." Mr Wilde said that as for consumption, there are pockets of buying but the market will have to wait almost a year for a solid recover