The subdued economic momentum in Greece has had a direct—and negative—impact on its ability to honor its foreign obligations, specifically its bailout loan.
On November 14, 2014, Greece’s economy finally registered some growth and emerged from recession. The economy expanded by 1.7% in Q314, compared to 3Q13.
One of the reasons for the increase in Chinese steel exports is excess production capacity. Higher global steel prices are another reason.
Chinese steel exports, often subsidized by the Chinese government, upset steel markets elsewhere. Some Chinese steel products are nearly 20% cheaper.
The World Steel Association had forecast that North American steel demand would grow in excess of 5%. But steel production is up by less than 1% in 2014.
The US rig count is an indicator of the oil and gas exploration industry’s health. The energy sector accounts for 10% of total steel consumption in the US.
The construction industry is still a pale shadow of its pre-crisis self. Automobile sales, on the other hand, have surged past pre-crisis levels.
Rising consumer confidence leads to high-value purchases such as real estate or automobiles. These sectors are the biggest consumers of steel.
U.S. Census Bureau data show a new home sales increase for the last three months. This uptrend is good news for the steel industry.
The U.S. Census Bureau’s monthly construction spending figures for October indicate an increase of more than 1% over the previous month.
Steel scrap prices fell ~15% in 4Q so far, which will likely benefit mini mills such as Nucor and Steel Dynamics.
Iron ore prices are a key metric investors in steel plays should watch. Iron ore is the primary raw material for producing steel.
Steel prices are a key driver for steel companies. Steel companies either make sales on contract pricing, or at current spot prices.
In this series, we’ll discuss the key steel industry indicators that investors in steel players should watch.
China became Africa’s largest trading partner in 2009, surpassing the US.
The CDS market is already pricing in expectation of deterioration in the sovereign credit risk profile of South Africa.
Fitch is in line with Moody’s and one step above S&P’s credit rating on South Africa.
Investors commanding ~$2 trillion worth of funds track the WGBI, a powerful reason for South Africa’s government (EZA) to encourage an investment environment.
Rating downgrades made South Africa’s economy more vulnerable to capital outflows, rand depreciation, and rising budget and current account deficits, as well as other factors.
For South Africa, the key to economic revival lies in the narrowing of its current account deficit.