NEW YORK (TheStreet) -- With the damage -- and the death toll -- in Japan still far from clear, manufacturing plants and nuclear reactors taken offline by the catastrophe will shake worldwide demand and pricing for raw materials, observers of the global commodities trades say.
Already investors have driven up shares of Posco (PKX), for example. The South Korean steel giant saw its stock rise nearly 5% in New York trading Monday, the second session after news of the disaster broke on Friday morning in the U.S.
Posco is seen as the likely beneficiary of increased demand for steel as its Japanese competitors are forced to contend with mills damaged by the quake. As much as 20% of Japan's steel industry has been affected in some way by the disaster, according to an analyst at Hyundai Securities who spoke with Reuters.
Even if the massive quake didn't directly damage some steel mills, the rolling brown-outs and diminished power generation in Japan could reduce production at the nation's otherwise unscathed plants."A near-term drop in demand for industrial metals and raw materials will likely follow as ports and factories remain closed," wrote Anthony Rizutto, the metals-and-mining analyst at the New York investment firm Dahlman Rose in his daily note to clients Monday. Over the longer term, however, analysts expect Japan's massive reconstruction effort to eventually boost demand for steel. Japan has the world's second-largest steel industry, albeit a distant No. 2 behind China. Last year, Japanese mills produced nearly 110 million metric tons of steel. China produced about 630 million. Among global steel names, shares of ArcelorMittal (MT) were relatively flat at $34.66, while U.S. players were in the red. Nucor (NUE) shares were slipping 1% to $46.63 and U.S. Steel (X) 0.8% to $54.68.
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