The continuation of prevailing trends and new developments has made it more likely that 2014 will be a difficult year financially for many steel companies. And, early indications for 2015are not favorable from the steel mills’ and steelmakers' raw material suppliers' point of view.

No near-tem1 relief in sight for the steel mills 1

Assessing the odds for steel industrγscenarios 2

Driving forces 3

1. Financial contagion spreading like a deadly virus 3

2. Only minor growth of Chinese steel demand in 2014 4

3. Steel demand outside of China may fall in 2014 6

4. Global steel production in 2014 may rise only 1 % 6

5. Global effective steelmaking capacity in 2017 may be down 9

6. Competitive pricing for hot-rolled band on the export market "a given" 11

7. Out-of-whack steel pricing relationships 13

8. Iron ore prices may plummet a further 10-15% 14

9. Coking Coal, FOB Australia, price too low to keep dropping 17

10. Steel scrap prices poised to collapse 18

11. The World Cost Curve for HRB is flattening this year 21

12. Chinese steel industry "wild cards" running wild 24

13. USA: "The steel place to be" 28

14. "Battle Metallica" in 2014 and beyond 29

15. Chinese Government may limit exports of commodity-grade steel products 30

16. Rising steel mill requirement to boost deliveries to affiliated downstream users 31

17. Automotive body sheet warfare 31

18. Forthcoming surge in non-Chinese steel futures trading activity 32

冶金工业信息标准研究院