Steel industry expects steady prices in 2005

The steel industry is optimistic about steel prices in 2005 after China raised interest rates to slow expansion.
Peter Fish, managing director of steel market monitor MEPS (International), told CJ that he expects overall prices to fall next year, although the British Constructional Steelwork Association (BCSA) was more cautious.
China's effect on material prices will lessen as the country steps up production.
Fish said: "China is self-sufficient in construction products, so you're not going to get a global strengthening in demand. They can, in tonnage terms, produce all they need. The Chinese aren't going to want structural sections, for example."
He added that panic buying was a contributing factor to this year's sharp price increases.
"We've been running through one of those phases in which some of the high demand has been to do with people finding themselves short of materials
and placing orders to make sure they don't run out.
"You do get shortages because of raw materials, but I think we're going to get back to a more stable situation - supply and demand are going to become closer again," Fish said.
BCSA director general Derek Tordoff said fabricators' costs have risen by 30% in the past year. He agreed the market will become more stable in 2005, and expects prices to rise at a steadier 5%.
"Looking at the comments from steel makers around the world, our deduction is that there is going to be much greater stability." Nevertheless, Tordoff added: "If we were to look back 18 months ago we would say 5% was a lot."
Tordoff said the last time steel prices reached current levels was 15 years ago. "They haven't kept pace with inflation, they dipped tremendously."
Fish does not expect prices to fall dramatically in the near future. "The old price of steel
has long gone. We're not getting back to a few hundred dollars a tonne, more like $500 or so," he said.