****it's official, chines steel demand will slow!!

China's steel market seen reaching peak - India's Tata

Tue May 24, 2005 9:06 AM GMT+02:00
NEW YORK (Reuters) - The Chinese market, which has driven much of the world's demand for steel, will reach its saturation point within a few years, forcing further industry consolidation after that country steps up its steel exports, a Tata Sons executive said on Monday at the Reuters Manufacturing Summit.

Once the Chinese market reaches that point, the steel mills there will increase exporting, raising pressure worldwide by driving down prices and profit margins, said Jamshed Irani, a director of Tata Sons, the controlling shareholder in Tata Group, which controls a range of companies including Tata Steel Ltd..

"Once China's usage is met, saturated, then the world of steelmakers will have to look out," Irani said at the summit held at Reuters headquarters in New York. "The pessimist would state two years. I would say somewhere between five and eight years."

While Indian steelmakers such as Tata Steel will thrive due to that country's plentiful supply of cheap raw materials, others -- including the U.S. steel industry -- will face questions of survival, he said.

The companies and countries that remain players in the steel industry will be those with access to raw materials, he said. Tata, for instance, supplies all of its iron ore and 70 percent of its coal and does not use scrap steel.

"In the long run, success is assured when you control your raw materials," Irani said.

The U.S. steel industry simply is not cost-competitive with top global steelmakers, he added.

Consolidation is inevitable and Indian companies, including Tata, will be among those doing the buying, said Irani, who added Tata Steel has deals in the works, including possibly buying a coal supplier.

"There will be quite a lot of consolidation in the steel industry. As far as steel plants in India are concerned, we may see some new plants coming up, but I think Indian steel plants will acquire outside their own territory," he said.

"We are talking about discussions with the possibility of acquiring something rather than constructing something," he added of Tata's discussions.

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A few years from now & we will all be selling our steel shares!!!!!!!!!

Better to sell now??? or wait a few years until the predicted boom will end????

lol, life is tough sometimes.

Cheers.