ArcelorMittal, the world’s largest steelmaker, announced recently it expects iron and steel prices to remain tight for the remainder of 2016.
This does not come as much of a surprise to the firm as it has identified steel and iron ore prices as being under significant pressure throughout 2015, at one point reaching historical lows. The effects have been far-reaching, as well, with a reported net loss of $7.9 billion in 2015, according to a report from the Economic Times.
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“Management currently considers it likely that while stabilization is possible, steel prices will remain on the low side at least through 2016, given expectations regarding economic conditions and demand,” ArcelorMittal said in a statement, according to the source. “Management expects iron ore prices to continue to remain under pressure in 2016 due to the supply/demand dynamics.”
Steel and iron ore prices are constantly fluctuating because they are at the mercy of the industries they serve. As the auto, construction, machinery and transportation industries go, so, too, goes steel and iron ore prices.
In recent years, steel has been riding the roller-coaster of volatility. From 2013 to 2014 when prices climbed steadily, to the second half of 2014 and into 2015 when they plummeted, reaching historical lows in 2015. to offset slumping steel prices and stop the bleeding, ArcelorMittal announced it will raise $3 billion from investors and sell a $1 billion stake in Gestamp, a Spanish auto parts maker, the news source stated.
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