Monday, May 25, 2015

Europe grapples with the global overcapacity issues within steel industry

 Since we have talking about globalization, I thought it would be interesting to share this information. Just recently, Europe has stepped up to fight over cheap steel imports from China and Russia. They have installed protection policies to curb the steel imports. These measures are likely to promote the local steel industry in the Europe. The author also identified another problem that is related to the steel industry. He says that excess capacity issues need to be addressed because these steel manufacturing companies do not want to shut down despite the fact that their business is no longer beneficial. They fear the excess costs and therefore want to keep operating. This has caused an over capacity issue because there is literally too much steel. The problem with over capacity will exist as long as the world is on the path of development. The supply equals demand is the formula which helps deduce it.

http://www.ft.com/intl/cms/s/0/1a797e18-009e-11e5-a8e0-00144feabdc0.html#axzz3b6cKLXus

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