Economic Slowdown Hits Steel Industry Hard

Steel makers are facing another hurdle, a down economy. The Associated Press reports that credit crisis and global economic slowdown have undercut customers in key markets — construction, automobiles and industrial equipment — sending prices tumbling and prompting steel companies to slash production, scale back shipment forecasts, delay expansion plans and furlough workers.

Analysts say that lower revenues and more layoffs loom in the months ahead, and production may not return to levels seen earlier in 2008 for more than two years. Demand for steel began drying up in August.

In North America, about 40% of steel demand comes from the construction market, while 20% comes from hard-hit automakers and another 20% comes from industrial equipment makers. ❖