Why Steel Market is Falling?
Steel Industry has always been the biggest contender for building construction due to its strength and resistance towards the natural forces. With the growing demand in USA for Steel Construction, India has also become the latest hub for Steel industry. In midst of this growing market of steel industry, equity market volatility of stocks are shaking and creating hassles for the investors who desired to invest in steel industry. Recently the steel indusry is not giving the fruitful returns. Despite this sad status, the hope is not lost entirely if the drawbacks are scrutinized carefully , a constructive solution can be arise.
Key factors effecting the Steel Sector:
- Cheap Import Prices in USA : Recently China (World's top steel producer) has seen the collapsing of their steel consumption and poor infrastructure investment that has highly effected the demand of steel in China. This deteriorating condition has created a huge gap between the supply and demand that leads to the cheap imports of steel among the some top American Steel biggies such as AK Steel Holding Corp. (AKS), Steel Dynamics Inc. (STLD),and ArcelorMittal (MT)
- Stagnation in China: Leading to the falling demand of steel in China, the economy is also slowing down which impacted on construction sector. As the construction activities are decreasing , the manufacturing sector is also droping off and the production of metal product going down.
- Geopolitical Rigidity: Some of the major nations associated with China's economic slowdown are highly getting effected in the area of steel industry. Along with China, the political instability in Middle East are also perpetrating the conditions of Africa, Russia and Brazil. Thus, the uncertainty in political conditions results in the decline of Steel demand.
- Surplus Capacity of Steel Industry: The demand and the capacity of steel production is not matching. This incompatibility between the demand and capacity has slow down the pace of steel market.
By close scrutiny , there are innumerable reasons for the falling of steel market but the topmost causes are the above mentioned cases that pulling the steel industry down. The measures to remove this shortcomings should be implemented urgently in order to save the sinking ship of Steel Industry.
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