“Steel market conditions have improved slightly in some regions, but crisis conditions continue to prevail in some economies.
It is uncertain whether the positive momentum observed earlier this year is robust and sustainable.”
(OECD, Steel Market Developments - Q4 2016)
“Conditions in the world steel market have improved over the past year. However, there are indications that this trend may be
temporary.” (Statement by Ronald Lorentzen, Chairman of the OECD Steel Committee, March 2017)
As the quotes above show, steel industry insiders often describe how steel market conditions are good or bad, or have improved or declined. However, it is difficult to be certain precisely what the “market conditions” may be since meanings and definitions vary according to the speaker. In some cases, ‘market conditions’ refer to demand and supply, while in other cases it can mean prices. Sometimes it is
describing all three. If steel market conditions could be properly defined using common indicators, it would be useful for determining
the current status of the steel market and predicting its future. In reality, however, this is no simple task for a variety of reasons, such as the difficulty of selecting key indicators, the complexity of models, and a lack of statistical expertise. This article examines different conventional means of measuring and forecasting steel market conditions, and introduces a simple but effective methodology that POSCO
Research Institute (POSRI) has developed and named the “POSRI Steel Index.”