Demand Destruction. Less confidence = less credit = less consumption

Steel demand in most regions of the world seems to be in the midst of a decline that might persist to mid-2009.  Versus 5-13% gains in quarterly year-to-year apparent steel consumption (ASC) in the past three years, ASC is projected to be down 4-10% over the next four quarters.

Steel production:  The best barometer of current apparent steel demand

Steel production, adjusted for the mills’ changes in inventory (that are rising at the present time), is an excellent measure of changes in apparent steel demand.  Hence, if we can estimate how sharply steel production will fall in the next few months and how much the mills’ inventories will rise, we’ll have a good indication of just how much apparent demand will be down. 

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