The consequences of the terrorist attacks of September 11 are still difficult to comprehend. They seem to be quite strong, but only of a short-term character, with the effect that the economic upswing expected for this fall is likely to be delayed. The growth forecast for 2001 has been corrected downwards from 1.8 to 0.7%. The immediate consequences for the manufacturing industry will only be minor. Due to the generally weak economic growth, in 2001 the market supply with rolled steel (106 million t) and crude steel production (88 million t) will lag behind the 2000 level by 12 %. Foreign steel trade is characterized by the imminent measures expected to be taken within the framework of Trade Act Section 201. The US International Trade Commission has recently determined the injury of the US steel industry by foreign steel deliveries. However, it is not clear what kind of sanctions will be imposed. The revenue situation of US steelmakers has become rather critical. The list of companies filing a petition for relief under Chapter 11 is becoming longer and longer. The reasons being the dramatic fall in steel prices coupled with rising raw materials and energy prices, the strong US currency and the growing competition between the integrated steelworks and the minimills, which have created additional cost-effective capacities (Nucor). The crisis primarily hits the integrated steelmakers who have been suffering losses both in 2000 and in 2001. Their sustained critical revenue situation and the associated liquidity problems make clear the necessity to cut non-profitable capacities and the inevitable trend towards growing concentration. A noticeable volume and price improvement is only expected for mid-2002. We will have to live with the risk of further companies running into liquidity problems and growing Government intervention in the form of subsidies or other trade barriers.
