Additional steel price hikes unlikely in 2006

Steel prices are likely to stabilise this year, despite a 37% slump in steelmaker Corus's profits.

Corus's prices rose between 7% and 12% during the third quarter of this year, with further increases of between 5% to 10% announced for the last quarter of 2006 (CJ 23 August).

A Corus spokesperson said yet more price hikes are unlikely this year, but "it's not possible to predict further ahead.".

Future omens for steel prices do not look good, however, with demand on the rise, increasing energy costs, and expenditure on raw materials up by £400m compared with last year.

Added to this, the Anglo-Dutch group - formerly British Steel - has seen its profits drop from £485m in the first half of last year to £305m this time around.

Also, the relining of Number 7 Blast Furnace at Ijmuiden, in the Netherlands, will start next month and end in November 2006.

This means steel-making capacity will be cut by 800 kilotonnes, which is expected to set Corus back by around £40m.

[Contract Journal, 6 September 2006, p 16]