This new Moody’s Investor Service industry report contains a look into the Asian Steel Industry. Moody’s placed the industry on a negative outlook due to destocking and slow economic growth weakening steel demand.
To whet your appetite, take a look at this excerpt:
“The negative industry outlook reflects our expectation that steel demand will weaken during the second half of 2013 to a level near that of the second half of 2012, owing to the destocking effect and slow economic growth, repeating the trajectory of the past three years (see Figure 1). Any increase in demand during the first half of 2014, driven by a seasonal pickup, will be limited.
Chinese steel demand grew 8.8% year-on-year in the first six months of 2013.This growth rate was substantially higher than the 2.4% growth for full-year 2012, although the economic fundamentals in China have not seen major improvements and China’s GDP growth slipped to 7.6% in the first half of 2013 from 7.8% in 2012. The demand growth reflected the expectation of a stronger rebound in the economy than the one actually occurred amid the transition to the new leadership in China. Although the Chinese property sector has stabilized, new construction activities, which drive steel demand, remain slow because of the Chinese government’s decreased emphasis on infrastructure spending. We believe a substantial amount of steel products has piled up with steel companies, distributors and customers, who were expecting stronger growth in the economy in the first half of 2013. They will have to reduce their steel inventory during the second half of the year.”
Purchase this report on the Asian Steel Industry