Wednesday, June 08, 2005

We sell steel, you can pay with oil

Mish's Global Economic Trend Analysis: Steel Revisited
"Everybody is horrified...They can barely cover the costs," said a senior iron ore trader at a major Chinese trading house. "They are trying to arrange (iron ore) shipments for later months. The situation is really bad. Prices for international market are not very good either. It's terrible."

Mittal Steel Co, the world biggest steel maker, said in May that consumption in the United States was suffering from an inventory overhang. The recent deferrals come as spot iron ore orders from China have been at a virtual standstill since April. The dearth of orders has led to a slump in Indian ore prices and international dry-bulk freight rates, which hit an all-time high in December.