European steel industry is desperately trying to increase prices. If they do not succeed in the attempt during the next weeks -as STEEL BLOG forecast-, 2012 will be a very hard year for the steel making and trading sector.
The assumption that european steel demand curve is inelastic, v.g., that there are no substitutional suppliers and consequently an steel price increase in Europe will not affect apparent demand, is a wrong principle.
Two are the big problems of the Steel Industry: Overcapacity and The Mining Lobbies. Meantime demand remains week, as announced, steel industry profits will go down.
The attemp to recover margins increasing prices is a wrong and an old fashioned way that will not be effective nowadays.
El Blog de JUAN JOSE DEL CAMPO GOROSTIDI. Automotive. Economy. Steel. Renewable Energies. WWW.CORDES.ES
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