The uncertainty over Tata Steel is a stark reminder of the structural over capacity in world steel market

In 2015, China exported over 100 million metric tonnes (MMT) of steel into world markets. This is greater than the annual domestic usage of steel in the US. On the back of this steel prices were driven to a very low level. Anti-dumping duties have been introduced in the US but not yet in the EU. Prices this year are already recovering particularly with the announcement of plans to remove 150 MMT of annual capacity from China’s steel industry and the pick-up in demand. The current uncertainty over Tata Steel is a stark reminder of the structural over capacity that exists in the world steel market. However, improving  steel market conditions should create optimism for the future of the plants. Unfortunately, the Brexit vote has impacted on the outlook for a potential takeover.

---

Comments are closed.