Even though most analysts agree the metals industry is struggling, what has changed some of their minds is the degree to which that struggle is going to go, and with that in mind, there were some positive moves in the market today with metals, and steel companies like U.S. Steel (NYSE:X) and ArcelorMittal (NYSE:MT), among others.
Few believe there is going to be a huge change in demand any time soon, but the macro-economic conditions have changed in light of the inflation challenges in China and the European sovereign debt crisis, which has generated questions on the demand side of the equation, which not too long ago was considered easy to estimate on the upside.
That has all changed now, and the uncertainties are continuing to weigh on the market and general, and steel producers and metal providers specifically.
On one side you had the surging price of iron ore which was sure to hit the steel industry hard, but with the slowing demand in China, even that has changed quickly, with iron ore prices dropping about 20 percent since then.
Now the iron ore companies are growing concerned with the drop in prices, while the steel industry is breathing a sigh of relief, which has led to some of the more positive outlooks today, from the point of view of it not going to be as hard on the steel industry as thought just a little while ago.
Consequently, analysts think while a correction was justified, it degree of the correction wasn't, and since the market conditions have changed drastically, they've given a more positive view of the steel and metals industry, although still holding price targets down, as iron ore prices are still up high, and demand for other metals don't have many trends to follow and make decisions on, as the market has been volatile and hard to read for now.
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