After a lull in steel prices, the market seems to be picking up and a brighter forecast spells a steady rise in the segment. This is also the same with iron ore partly due to the rise in demand from the Chinese market. The demand from China seems to be improving steadily as demands arise from its infrastructure development projects.
There has been an improvement in steel demands in US and Europe as well. The imposition of anti-dumping duty has also benefited concerns like Arcelor Mittal.
But the biggest concern in news is the Tata's Steel concerns in the UK. Due to hurdles regarding the pension fund which has created a liability of seven hundred million pounds, it seems a sell-off is unlikely. A potential strategic partnership seems to be a better bet for the ailing business. But this is a tardy process and is at a preliminary stage. Another recourse is to cut costs as much as possible. How this will be brought is not clear.
The problem has arisen due to low prices in the steel market. This was in making as the World was oversupplied with steel. The China-driven demand faced a standoff due to slack in its industries. To make matters worse the local production of Chinese arose significantly. Excess production was dumped outside the country triggering stiff competition from global manufacturers.
The rising prices have raised some hopes till the Chinese concerns raise their output to offset the gain in prices.
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