Economic growth in Asia is the key driver for the big upswing in steel prices around the world, along with capacity utilization exceeding 85 percent.
The rollercoaster-shaped chart below from Macquarie Research shows the steel price trend since 2007 in the U.S. China, Europe and the world overall.
Starting in late 2007, there was a near-vertical climb to a peak in mid-2008, followed by (as the global financial crisis and deep recession took shape) a near-vertical plummet through early 2009. The broadening economic recovery has been accompanied by a bounce-back in steel to price levels not seen in more than a year – up nearly $200 per metric ton in the U.S. since the bottom.
In the past month fabricated steel prices have been matching or even exceeding the prices for iron ore and nickel (for stainless steel) after lagging these raw materials for the past year.
Macquarie believes that steel prices will continue to increase at least through the second quarter of 2010, with a strengthening of economic recovery in the world outside China being a driver, before growth slows in the second half of the year.
Disclaimer: This page contains affiliate links. If you choose to make a purchase after clicking a link, we may receive a commission at no additional cost to you. Thank you for your support!
Leave a Reply