Steel prices hold steady despite fall in demand

Steel prices will not drop this year despite a dramatic downturn in demand and falls in raw material costs.

Steel construction specialists are predicting prices will stabilise at current levels well into next year as the era of rampant price rises comes to an end.

Producers tried to implement their latest rise of £60-a-tonne at the start of this month. But contractors said the increase has not been accepted by the industry.

British Constructional Steelwork Association president Richard Barrett said: "A price rise was planned for the beginning of October of £60-a-tonne, but producers are having difficulty getting that through. We won't see any more price increases for some time."

A plateau in prices will be some relief after years of increases. But contractors are not banking on prices falling in the near future.

One said: "It looks like prices are holding, but there is no sign of prices coming down before the end of this year. After that, it's anyone's guess."

Recent price hikes were fuelled by soaring demand in emerging markets like China. That has now tailed off, while the price of raw materials such as iron ore has plummeted in recent months.

Barrett said: "Prices have been all over the place for some time, so stable prices will be a relief because it makes it easier for firms when it comes to forward planning."

Corus has reacted to a downturn in demand by cutting crude steel production over the next three months by up to 20% - or 1 million metric tonnes.