After steel prices finally peaked the summer of 09' we are finally starting to see prices decline, which is a clear indication that the increase in steel production has caught up to demand.

Steel makers and manufacturers have control of a variety of markets, ranging from industrial users down to the consumer, which indicates the economy may be on a strong rebound.

Governments especially including China, and the United States have come out with stimulus packages. Steel manufacturers of everything from raw steel to carriage bolts took the chance to increase production and bring it back to what it used to be. Earlier in the market slump some of the world's largest steel makers began increasing steel production. The largest steel maker in China has begun to increase steel manufacturing in response to a rising demand for steel, because auto sales have steadily increased over %50 percent from July of 2008.

The fast rebound to declining prices after a seemingly quick upturn shows the weak and flimsy side of the world's economic situation. Some countries and markets are exhibiting strength while other markets are proving to be weak and unstable. The fast rebound and declining prices also provide useful information that helps steel makers understand whether these details show real demand or if producers and car makers are just stocking up.

The chief executive of a Germany based steel producer that is known for selling and steel production in Europe and North America. This steel producer out of Germany questions whether there is a real demand for steel or if increased production is due to companies taking the opportunity to fill depleted inventory. The chief's firm has seen a decline in the last year of 1.7 million tons of steel.

Steel demand has a good possibility to rise in the second half of the year. We warn that producers of steel need to show good discipline and make sure they don't give in to the market tendencies.

As of the past month, some steel buyers have added that steel producers are purposefully raising prices with no real reason and are attempting to raise prices to 40-$60 a ton for a hot-rolled sheet of steel. The question still stands, will the price increase stick? We are finding that a number of Steel makers are opting to not speak about their future ideas but are keeping their minds open.

In the past economic down turns, have sparked steel makers to react quickly to an economic struggle by slashing supply before the cost of steel tanked. Some firm almost dropped steel production completely for some time early last year. Some Steel Corporations have cut production all together and even been forced to lay off steel workers. Steel makers clearly overreacted in abruptly shutting steel mills down in 2008 and early this year; however, steel makers in North America have taken a step in the right way and increased steel production in the 3rd quarter.