LUXEMBOURG (AP) - Europe's two biggest steelmakers, ArcelorMittal SA and ThyssenKrupp AG, were upbeat about weathering any global downturn this year, saying Wednesday they expected strong steel demand and higher prices to cover soaring costs.
Chinese efforts to hold back cheap steel exports and recent stockpile selloffs in North America and Europe are expected to boost demand, particularly as fast-growing economies in Asia, Latin America, Russia and eastern Europe call for steel for more buildings, cars and machines.
ArcelorMittal chief executive Lakshmi Mittal said he believed the steel industry was growing ''in favorable conditions'' especially as his company expands in China, the main driver for global steel demand.
ThyssenKrupp CEO Ekkehard Schulz said he also expected 2008 to be another good steel year: ''The signs for this on the market have been increasing recently,'' he said.
ArcelorMittal - the world's biggest steel company with 10 percent of global output - shrugged off a potential U.S. recession, saying developing countries now make up 60 percent of world demand.
The Chinese market is now four times larger than the U.S. and a 2 percent increase there would offset an 8 percent volume decline in the United States, Mittal said.
Read the full story :-Santa Barbara News-Press
I don't know whether or not, this is a case of the steelmakers "talking up" the market, and I am surely not qualified by comparison with the eminent gentlemen quoted above, but I'm not certain I share their confidence.
With consumer demand predicted to be lower in the Western hemisphere and a "credit squeeze" with us, it's likely that steel consuming industries may start to feel the pinch as sales of cars and domestic appliances slowdown.
The steel distributors and converters are reporting difficulty in passing on the full increases to the end users, and there is a general feeling of uncertainty.
Prices are going up in response to cost increases, but where it will end is not an easy call.