Balli Steel Forecasts Economic Recovery In Five Phases
on: July 3, 2009, 7:16 am
Author: Balli Steel
Steel, one of the world's largest privately owned independent
commodity traders, has forecast that the global economic recovery
will sequentially occur in five phases, with increased demand
for steel in each sector acting as a barometer or indicator of
Steel highlights that global annualised steel production this
year is forecast to be 1.1 billion tonnes, down on last year's
record 1.3 billion tonnes, but significantly higher than the 800
million tonnes recorded in 2000.
considers the steel markets of North America, Europe and the Gulf
Co-operation Countries (GCC) the hardest hit by, not only the
credit crisis, but by overstocking and speculation on future prices.
Balli expects the market in the GCC economies to see a gradual
improvement while North America and Europe will experience continued
problems. Forecasts indicate that Japan and South Korea will also
continue to face economic challenges since their industries are
more dependent on Western Europe and North America.
Alaghband, Group Chairman of Balli Steel, said: "The
credit crunch and global economic downturn has had a 'Tsunami
Effect' covering all key economic sectors: steel and other commodities,
property, automotive, capital goods and finance. At present steel
producers are operating only at around 50-60% of their capacity.
We consider the implementation of government driven stimulus packages,
which will see significant public sector investment in civil engineering
and infrastructure projects, will procure the first phase of the
global economic recovery."
Steel considers that the second phase will be characterised by
a gradual recovery of the housing market that is expected to begin
in Q4 2009, and which will be led by key cities such as London,
New York, Singapore and Hong Kong.
Alaghband observed: "With prices down by up to 40% in certain
markets, overnight interest rates at the near zero level, and
yields at up to 10%, property has become a good long term investment
again. With supply at a record low we expect the market to grow
steadily through to beginning 2010 and well into 2014. The return
to the market of competitive mortgages will prove a further boost."
three of the recovery will be characterised by increased demand
for products that rely on unsecured loans and consumer-credit.
Balli Steel calculates that the retail, white goods and automotive
industry will begin to see a return to recovery to begin around
also expects a recovery of the global shipbuilding industry, providing
a major boost to steel
traders, in the first quarter of 2011, marking the return
to more normal international trading patterns and leading the
fourth phase of the global recovery. The fifth phase will be a
return to more normal investment in capital goods by producers
as they gain confidence in the state of the world economy.
are by no means out of the woods yet and there is a lot of pain
ahead of us in 2009 and 2010. But in the last few weeks as I speak
to business counterparts the general consensus appears to be that
we are no longer in a state of uncontrolled free-fall and we are
at or close to the bottom in a number of markets", said Vahid
Balli Holdings, is a large private, multi-national corporation,
headquartered in London, but with offices in Dubai and other key
business hubs around the world.
was established in 1982 and operates a number of affiliated companies
specialising in commodity trading, industrial, real estate and
private equity with operations in over 20 countries. Together
with its affiliated companies, Balli employs over 2,000 people
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