LONDON (Commodity Online): Even as gold is set to cash in on the European economic crisis, other metals like steel and copper are set to witness a fall following the debt crisis in Greece, Spain and Portugal.
The debt crisis has hit several nations in the Europe and the Euro is also struggling. This will help gold because panicked investors will rush to park their money in gold as a safe haven.
But, in the case of steel, copper, aluminium and other metals, the situation is entirely different. An ArcelorMittal, the steel giant, official has already said that the European crisis will impact the steel prices and demand. So, in the coming days the world may witness a fall in steel demand.
To add to that China has imposed strict rules on realty sector like barring people from buying third house in Beijing. This move will certainly have an impact on realty and if construction work slows down demand for steel and copper will come down. In fact, China is the biggest buyer of both these metals.
Meanwhile a report said following a weak first quarter, with economic activity and consequently steel consumption negatively influenced by the severe winter conditions in the EU, real steel consumption is still hesitant but positive year-on-year growth from the second quarter onwards. Towards the end of this year, the growth rate could become slightly firmer.
On balance, real steel consumption in 2010 will stabilize at around the year-earlier level.
On a par with the expected rise in production in the steel using industries, real steel consumption will show a more robust rebound in 2011. Also, the anticipated increase in steel intensity following its decline during the economic downturn will be supportive of growth in steel consumption.