Steel Prices Stay Firm

Monday, January 03, 2005
With global steel demand running at an unprecedented level, rapidly rising prices have been a constant headache for ship repairers, as well as ship builders, in recent months. And despite sharply higher steel output, there is little sign of any softening as the New Year dawns.

According to the International Iron and Steel Institute (IISI), crude steel production for the 62 countries reporting their figures was 945m tonnes by the end of November, up 9% on the corresponding period one year earlier. Analysts were expecting total production to break through the billion tonne mark easily by the end of the year for the first time ever. IISI figures show that China accounted for the largest increase in output. To the end of November, Chinese steel mills had produced 245m tonnes, up a staggering 22% on the year before. The Chiense total was approximately twice the output of the whole of North America, an increase of just under 8% on one year before.

However, whilst higher production is going some way to meeting recent hikes in demand, there is still a net shortage of steel and prices have continued to firm as a result. According to MEPS International, a steel industry analyst based in Sheffield, UK, steel prices have risen by 150% in the last three years. “We are completing the most tumultuous year that the world’s steel markets have ever seen”, the analyst stated recently in one of its market reports. “Steel consumption is at record levels. It is scarely surprising that steel prices have been at historic highs”.

The analyst, which tracks steel prices across a range of production areas, reckons the average price for flat rolled products in December is US$724 per tonne compared with $449 a tonne twelve months ago and $373 in December 2002. “On an index basis, taking prices in January 1997 as being equal to 100, we find that the world average flat product price fell to a historic low point of 63.2 in January 2002. Since then, however, there has been an almost continuous climb, until the index for this month stands at 163.4, up 150% in three years”, MEPS declares.

Moreover, the declining dollar has made matters worse. The effect has been to inflate steel product values in countries such as those of the Eurozone and Asia although MEPS stresses that China is an exception because its currency is pegged to the dollar. Meanwhile flat steel prices are highest in Europe, with an average price of $794 coming in higher than North America’s $780, which itself has eased slightly over the last quarter from a high point of $860.

However, international steel prices are showing little sign of easing, according to a senior steel industry executive. Pascal Ponty, managing director of Arcelor’s Building and Construction Support division, told an industry meeting in Paris that economists at the world’s largest steel producer had been surprised by the continuing high price of steel. The surge in prices brought about by demand from China shows no sign of slowing down, he said, noting that the company’s economists had expected Chinese demand to tail off and prices to come down during the autumn.

Output has risen, Ponty said, but not fast enough to match demand. Moreover manufacturers are constrained by shortages of raw materials, particularly coke, and shipping capacity. This has resulted in waiting lists of up to 18 months for some types of steel, he said. And the shipbuilding boom in the Far East is itself increasing demand for steel still further.

Maritime Reporter June 2014 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Shipbuilding

Bollinger Fourchon: 13 Years Without a Lost Time Accident

Bollinger Shipyards, Inc. announced that their Bollinger Fourchon, L.L.C. facility has worked 13 years without a lost time accident. Building on a philosophy that starts at the top,

Regulations Threaten Superyacht Innovation

To increase innovation within the superyacht industry, designers need to work with flag states, classification societies and naval architects to ensure regulations are workable, as said by experts.

News Flash! Greek Shipowners Prefer Bulkers

The buying interest from Greek ship owners is focused on bulkers to an increasing extent, BIMCO said. Data from VesselsValue.com reveal that Greek owners were at

Patrol Boats

S.Korea Ferry Boss's Driver Turns Self In

The driver of a South Korean businessman wanted over the sinking of a ferry that killed 304 people turned himself in on Tuesday, potentially unlocking the mystery

Gondan to Build Spanish Patrol Boats

Gondan Shipyard has recently signed a contract with the Guardia Civil, Spain’s Civil Guard, for the building of two patrol boats. The aluminum and fiber (PRFV ) vessels will measure 20.

Coast Guard Responds to Grounded Freighter in Lake St. Clair

The Coast Guard has responded Sunday to a 656-foot freighter that was hard aground in the downbound shipping channel of Lake St. Clair. Initial reports indicate

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Maritime Standards Naval Architecture Navigation Offshore Oil Port Authority Ship Electronics Ship Simulators Sonar
rss | archive | history | articles | privacy | terms and conditions | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1512 sec (7 req/sec)