Steel and the global economic crisis

The past year has been extraordinarily turbulent for the global steel industry. Indeed, the first six months of 2008 saw the continuation of a protracted period of growth in the global production of steel, sustained largely by high levels of demand in China and India (and masking falling demand in Western Europe and the US) and reflected in unparalleled increases in the global prices of iron ore and coking coal. However, in recent months the combined impact of the credit crunch and difficulties in securing lines of credit, the economic downturn, and the collapse of consumer confidence have meant that the fortunes of the steel industry have taken a dramatic turn for the worse, with global demand for steel falling rapidly, steel prices collapsing, and steel companies slashing production (for example ArcelorMittal, the world's largest steel company has cut steel production from between 30 and 50% for its various products in the 4th quarter of 2008).