Reuters reported that global demand for steel is down by around 20% at the moment, but with destocking nearing to an end, the industry is likely to see some signs of recovery by the end of 2009.

Mr Ian Christmas director general of the World Steel Association at the Reuters Global Mining and Steel Summit said that "I would be very surprised if there were not green shoots out there by the end of 2009. Stocks are very low and we see destocking coming to an end. By the end of 2009, I'm sure some steel companies will say 2010 is looking much better than we thought this time last year."

Mr Christmas said that “Steel demand and prices have collapsed since mid 2008 after consumption from the major steel consuming sectors such as automotive and construction came down sharply, forcing producers across the globe to slash output sharply. The capacity usage across the sector is around 50% to 60% currently, with global production down 24% in January.”

He declined to predict global steel production for the whole year but said that "Production will be off 20% in the first half.”

Mr Christmas added that "Everybody’s overdoing the pessimism.”

He expects government stimulus packages to help boost spending and demand for steel. He said that "I still think that as compared with previous recessions, Asia has some more positive dynamics to it. Population growth, income growth is there. The Chinese economy will come back and will have favorable impacts for the industry.”

Mr Christmas said he was rather pessimistic about Western Europe, where he predicted a recovery would take some more time, but was rather upbeat about the outlook for the United States. He said "It is a more flexible economy.”

(Sourced from www.reuters.com)