World Steel Dynamics believes that in the coming months, global steel prices will experience a sharp correction, but the decline may continue for less than a month. In early 2011, prices will rapidly rise and the trend will be “V†shaped. At the same time, due to the current supply of iron ore in excess of 110 million tons on the market, iron ore prices may also fall sharply. However, factors such as a weaker dollar, strong demand from the Russian transportation industry, and growing demand in Brazil will support iron ore prices. The agency expects steel prices to stabilize in 2011, and that the global steel demand will grow at an annual rate of 3% since 2012.
Aditya Mittal, chief financial officer of ArcelorMittal, the world's largest steel maker, said on the 26th that the company’s attempt to raise steel prices failed, and the company currently expects average selling prices to fall sharply in the last few months of 2010.
The company expected its net profit in the fourth quarter will drop on the 26th and said that the company will maintain its output in the fourth quarter because demand is still “moderateâ€. In the third quarter, ArcelorMittal’s net profit reached 1.35 billion U.S. dollars, which was higher than the 903 million U.S. dollars in the same period of last year, which was a year-on-year increase of nearly 50%.
Mittal said, "We have tried to pass on the impact of rising cost of raw materials, which is why we expect the price to stabilize from the fourth quarter."
In July, ArcelorMittal said that the company had tried to increase steel prices by 10% in 2010 to maintain profitability, and passed on the impact of rising costs of raw materials for steelmaking such as iron ore and coking coal.
Lakshmi Mittal, CEO of ArcelorMittal said. “The price increase of 10% seems unlikely at present.†“Uncertainty in the pricing system is causing price increases to be limited.â€
Arcelor Mittal said that continued weakness in demand and a drop in consumer confidence will lead to a drop in steel prices in the fourth quarter.
Mittal said that the company expects global steel demand to increase by 6% year-on-year in 2011, but expects demand to increase slightly in the final months of 2010. The company expects global steel demand to increase by 13% year-on-year in 2010.
The company said, "We hope to see consumer demand growth in 2011."
In the third quarter, global steel demand fell by 6% quarter-over-quarter, partly due to the seasonal weakness in Europe and the tightening of China’s monetary policy.
Arcelor Mittal said that China’s apparent demand in the fourth quarter is expected to improve, demand from developing countries is close to the pre-crisis level, and demand from developed countries is still lower than pre-crisis levels. The company has a large number of risk exposures in southern Europe and the construction sector. The economic recovery in this sector lags behind other areas such as German car demand.