Steel Prices in 2009

This is an update received from our trade association the BCSA, regarding Steel Prices in 2009.

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Steel prices, along with prices for concrete and rebar, have seen dramatic increases over recent years driven by global demand, particularly from China and India. The demand has been both for steel and the raw materials for steelmaking eg iron ore and coal. However in recent months there have been reductions in global demand which has resulted in a steel prices plateauing.
Looking forward through 2009, it is likely that there could be steel price reductions in the first half of 2009. However the fundamentals of world steel supply in the medium and long term are unchanged and it is anticipated that global demand and prices will eventually rebound, the key question is exactly when and this, of course, is a little difficult to forecast.
The expectations for the price of iron ore and coal would suggest modest price reductions in 2009 (though these may a while to feed into the supply chain). Whilst energy costs in the UK remain stubbornly high, shipping and other ancillary costs will react to the market volumes, falling in the short term and potentially rising with the anticipated recovery in demand.

In summary BCSA is confident that steel prices are highly unlikely to increase in the first quarter of 2009 and modest price falls are anticipated. There may be a recovery in the second quarter but again this will be modest and offset by cheaper raw material supply. The likelihood of volatility in prices seen in 2008 is very remote. For more information on how prices are being effected on all cold rolled sections contact Ben Beaugeard by telephoning 01953 603081 or email ben.beaugeard@hi-span.com