China’s steel industry may rebound faster than in other regions, which will be positive for iron ore and coal because of the nation’s dependence on imports, according to Credit Suisse Group AG.
The global steel market was in a “very weak state” at the end of 2011, with the exception of the “rapidly recovering” U.S., the bank said in a report today. Steel output in China “collapsed into the year end,” according to the report.
“The output rebound will be most profound in China, which should be more positive for ore and coal,” analyst Michael Shillaker wrote. “In China the absolute output cut is already as sharp as it was in 2009 and it seems hard to believe Chinese output can go materially lower than here.”