Bloomberg quoted Mr Paul Zuckerman CEO of Fletcher Building Limited as saying that global steel demand may take at least 6 months to recover as job losses slow in the US and people resume buying cars and home appliances.
He said that “Production cuts and public works projects should start reducing stockpiles of heavy beams, pipes and other long steel products in the next 2 to 3 months. Demand for sheet steel may take longer to recover.”
He added that "I do not think we are seeing real demand yet. It will be another quarter or so until we really start to see whether or not we have hit the bottom. Then the real underlying demand will kick back in, or not."
Mr Zuckerman said that still, prices are holding up, a sign producers are cutting output rather than dumping steel in overseas markets. He added that "Typically, with an inventory overhang you had expect prices to drop if people thought they could work their inventory through more quickly by dropping the price and selling more. It is fairly well acknowledged that demand just is not there.
Fletcher"s Pacific Steel mill in Auckland is New Zealand’s largest steel producer after BlueScope Steel Limited"s Glenbrook factory. Fletcher is the largest steel roofing maker in New Zealand and their Stramit units in Australia accounts for about 30% of that nation’s painted and roll formed steel market.