On February 10th, both Mittal and SSAB presented their 2009 results and, more importantly, profit warnings for Q1 2010 results.
Why already now warn about the first quarter results? I believe that there might be a couple of reasons, but the first and principle reason is that the crisis is not over (so prices are still low even as volume is coming back) and when it's over, the steel industry will still be bleeding. Once and for all the market structure has been changed -- in favor of the Chinese industry. Trade intervention (read: the Americas and Europe) might very well delay this teuctonic change to appear before the naked eye, but it has already happened.
This might imply that the steel industry is an interesting investment in the short term, perhaps even the medium term. But in the long-term, the cyclical profits might not return. If that is the case, one has to analyse the systemic differences between the steel companies to see who is really fit for fight and in which markets.
In the short run, a difficult Q1 might help the investor to pick some great opportunities -- to hold in the medium term!
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