Steel market to rebound in 2010?

2010-01-05



Producers and distributors of steel products are hopeful that 2010 will turn out to be far more profitable than 2009. The steel market is expected to show signs of improvement in H2 2010, we read in Parkiet.
The upturn will be driven by a number factors, such as the large number of infrastructure projects due to begin during this period and an anticipated growth in demand from the construction sector. According to estimates from the Polish Steel Association, steel output may reach around 9 million tonnes in 2010, as compared with 7.5 million tonnes in 2009 and 9.7 million tonnes in 2008.
At the present time the steel sector is facing numerous difficulties, including payment backlogs, especially from construction firms. This is proving troublesome for distributors – those firms that did not restructure during the crisis, currently have cashflow problems and have encountered insolvent contractual partners, may find themselves in financial straits. The parlous state of many firms operating on the steel market may trigger a wave of takeovers from players on a firmer financial footing. Simultaneously, however, the current credit squeeze may deter them from undertaking such risky transactions.

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