And with the WSA forecasting a strong recovery in Asia and especially Australia, perhaps BlueScope Steel, the country’s biggest steelmaker, will soon start upgrading its outlook.
It said in its annual report yesterday that "At the time of writing this Report in August 2009, we remain cautious but encouraged by the initial signs of improving market conditions globally."
The report was written in August.
"Demand and pricing in some markets, particularly in our prime market in Australia, is improving, but both off a low base.
"Inventory levels have been significantly reduced and we are starting to see restocking occurring.
"Raw material costs are lower as we move into FY2010 which should in turn, improve margins as demand returns.
"We are in a transitionary period – moving from very low to improved levels of demand, production and pricing.
"We expect to deliver a small negative reported net profit after tax (NPAT) for the first half of FY2010.
"This is primarily due to the timing lag of the improved steel prices flowing through from sales and improved demand."
The company said factors influencing that forecast will include the strength of the Australian dollar, reduced capacity utilisation until September when the No. 5 Blast Furnace resumes production, and the continued challenging market conditions in the US.
Since August, the Aussie dollar has risen sharply, up by nearly 10%, from around 82 to 83 US cents to just over 90 US cents in recent days.
BSL said that the steel industry worldwide has responded well to the downturn.
"With market conditions deteriorating, the industry quickly and efficiently reduced production to match demand.
"This production challenge continues as the market begins its recovery.
"Steel prices have bottomed and are now rising. Price recovery for the industry globally is expected to be slow until steel capacity utilisation improves.
"Growth in the US and European economies is needed to support a sustained recovery.
"Stimulus efforts in China and in the US, through government projects, are beginning to take effect and we look forward to seeing positive economic impact from the Australian stimulus package."
But no joy for shareholders on the resumption of dividends.
"After careful deliberation, the Board took the difficult decision to not pay a final dividend for the FY09 year.
"We look forward to resuming dividend payments as the world economic conditions and BlueScope’s financial results improve, returning to our long term practice of rewarding shareholders as we grow," directors said.
