Stock Market

In the world of business and finance; a share of the stock of a corporation refers to a share of ownership of the corporation. These terms of ’stocks’ and ’shares’ are however often used interchangeably in North America and by people outside of the industry. There is always a lot of interest in the international stock market, especially when the prices of particular commodities are rising or falling in a dramatic way. In the current economic climate of late 2008, there is a lot of movement in stocks and shares – due to the downturn in economic growth on a global scale. The steel stocks and shares that are tied up with the steel industry are suffering at the moment along with the rest of the economy.

Early in 2008, steel prices increased all over the world. Some steel companies were having record profits and forecasting even bigger profits for the time ahead. This dramatic increase in prices was due to the increasing cost of a number of raw materials that are needed in the production of steel. Iron ore, coking gas, electricity and oil all increased in price and led to this rise in the cost of steel. It simply cost more for the big steel plants to produce a Loose Flange (Lose-Flansche) and the prices were carried on to the customers. After the recession began in the recent months of late 2008, the cost of these raw materials has started to drop rather quickly. What is interesting is that the price of steel did not drop to the same degree right away. As this was the basis given for the price increases at the start of the year, people were beginning to wonder what was going on.

As the recession lasts for longer, there is not much that the big steel plants can do about the prices any more. The prices are finally dropping in relation to the cost of raw materials and the consumer can finally benefit. The purchase of small components such as elbow fittings (Rohrbögen) and large car parts are all starting to drop. This is having an effect on steel stocks and shares which are dropping as well. Less people are buying steel and the companies can no longer justify the pricing structure that they were holding on to at the start of the year. Experienced traders on the London Stock Exchange and elsewhere can take advantage of these conditions if they can accurately forecast steel prices for the future.