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Steel prices predicted to rise
Propurchaser
Steel prices were widely anticipated to taper off in the second half of this year, due to increased output, mainly from China.
But observers are now predicting a reversal, saying prices may rise sharply in the third and fourth quarters to offset rising costs, especially a 19 per cent increase in iron ore, a key steelmaking ingredient.
Steelmakers also predict demand from the construction and automotive markets to be stronger in the second half of the year than predicted.
Also, China's Baoshan Iron and Steel Co. Ltd., the world's sixth-largest steel maker, announced it will raise third-quarter steel prices by more than six per cent to bring them closer to global levels and compensate for rising raw material costs.
Before rebounding this year, China's steel prices had plunged 32 per cent between March and December of last year as capacity expansion led to a glut, especially in construction steel and flat products.
Putting this all together, some analysts say steelmakers could increase prices by about $100 per metric ton for some products, potentially surpassing record steel price levels in 2004. The world's average price for hot-rolled coil was at about $550 per metric ton in May, according to World Steel Dynamics. The global price peaked at about $630 per metric ton in September 2004.
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