(Always like to follow the fortunes of steel as a indicator of future growth ... note that SLX has fallen throughout January (from early Jan peak) at a bit faster pace than equities (~15%) - AM).
By Peter Marsh in London
Published: February 1 2009 17:45
The global steel industry faces a difficult two years with a likely 10 per cent fall in demand this year followed by virtually zero growth in 2010, according to Bruno Bolfo, chairman and owner of Duferco, the world’s biggest steel trading company.
The comments by Mr Bolfo – whose Switzerland-based company also has a joint venture in steel manufacturing with Novolipetsk, the Russian steelmaker – are the gloomiest remarks about the state of the industry by any senior steel executive during the current downturn.
However, some analysts have been at least as downbeat on the industry’s prospects.
Mr Bolfo, whose company is based in Lugano, said any steel company that professed to believe that an upturn in the sector was likely in late-2009 was deluding itself.
“The official line from the big companies is that a mild recovery of sorts could start in the second half. Of course, they have to say this – but really there’s not much hope. An upturn so soon is just not on the cards.”
Any pick-up in global steel demand in 2010 would be “small stuff”, said Mr Bolfo.
His comments command a lot of attention in the industry since he has a good view of trading patterns in steel on several continents.
The downturn in the steel sector is a particular shock for many executives since, in recent years, demand in the sector has been bounding ahead, triggered particularly by a big leap in consumption in China – by far the world’s biggest steel producing and consuming nation.
Mr Bolfo said his gloom was justified by the large contractions in output in many sectors that are big users of steel, including automotive and construction – fields that have been especially hard hit. But there are also others that have been less in the spotlight.
“It is impossible to be optimistic if you look at other areas such as investment in oil exploration and supply, where, even here, activity is much lower than it was.”