Bloomberg reported that Credit Suisse Group AG recommends buying steelmakers next year on expectations of a significant recovery in demand for the metal from China.
Mr Michael Shillaker analyst at Credit Suisse wrote in a note that the bank expects global demand to grow 14% in 2010, above the World Steel Association’s forecast of 9.6%.
He said that "We maintain our preference we stated from October 2009 for steelmakers over raw material suppliers through early 2010, with ArcelorMittal and ThyssenKrupp AG as our favored names. ArcelorMittal will advance at the start of the year and ThyssenKrupp will be the big story for the latter part of 2010."
Credit Suisse maintained its overweight recommendation on mining and steel companies' shares and sees opportunities to switch back into raw material suppliers as steel production overheats through the latter end of 2010.
The bank also advised investors to prepare for a catch up trade relative to the larger caps for Salzgitter AG, SSAB of Sweden and Voestalpine AG.