Las Vegas (Platts)--30Apr2009

World economies will recover, analysts and economists said during a panel
discussion at the Institute of Scrap Recycling Industries in Las Vegas, but
they differed on the ultimate length of the current downturn.
Michelle Applebaum was the most pessimistic. "I don't see a lot of good
going on, because I talk to a lot of steel people," the Michelle Applebaum
Research chief said. She added that any recovery in steel markets would have
to be led by China, which accounts for 60% of global capacity, 50% of
production, and 40% of consumption.
Applebaum said that steel is the vanguard of the global economy, and that
there was still deterioration in steel markets, month on month. She noted,
however, that the steel industry usually lags the general economy in any
recovery.
Brian Wesbury, chief economist at First Trust Advisors, Wheaton, Illinois
was more optimistic. "We have now seen every measure of economic activity
improve, even the fall in housing sales is slowing," he said. He saw the
economic crisis as V-shaped, a steep decline that hits the bottom and then
ascends rapidly. "We will be surprised by how the economy bounces back," he
added.
But William O'Neill, managing partner, Logic Advisors, Upper Saddle
River, New Jersey said that the bottoming out of the current economic crisis
will last much longer. The downturn was more like a pool, descending
rapidly, flattening at the bottom for a stretch before rising again. "We are
in a bottom process, but not a 'V'," he said.
O'Neill and Wesbury agreed, however, that any recovery, regardless of
when it happens, was likely to be rapid. "I do believe that we will see a
recovery take shorter [time] than we expect. I don't expect a 'V' recovery,
but we will see a recovery and it will be faster than it should be," given the
severity of current conditions, he said.
--Matthew Lerner, matthew_lerner@platts.com