China steel production faces weak customer demand

According to Fitch Ratings' 2009 global steel outlook report, China cut steel production in the face of weak domestic and export demand may need to shutter upwards by 20% capacity (high-cost) longer-term. But Fitch expects China to lead demand recovery since excess production would pressure weak markets in Europe and North America. Meanwhile, rising steel prices in China will tend to signal the end of destocking, while sustained price appreciation, increasing freight rates and rising scrap prices will tend to signal improved demand. In addition, Fitch expects the current sharp contraction in steel demand to continue to weigh on steel production and pricing through the first half of 2009. While in the short-term the steel market will be in a downturn, the ratings outlooks on the vast majority of Fitch Ratings' steel coverage are stable.Nike Shoes