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Steel Prices Set to Fall
The prices of almost all industrial metals have hit record highs this year. World steel prices were have risen especially sharply. They have risen 40 percent on average, largely due to the imposition of an export tax on steel by the People's Republic of China that has significantly reduced that country's steel exports. Rising production costs (doubling this year), high demand and low reserves have also contributed to the tendency. Many specialists say that the price of steel is about to undergo a correction, however.
Steel producers have passed high production costs on to consumers. ArcelorMittal, for example, has raised its prices several times this year. Now, experts say, further price hikes are impossible, and producers will have to absorb future production expense increases.
Nonetheless, steel prices continue to rise, but that tendency is expected to reverse itself in the second half of the year. Demand for industrial metals is highly sensitive to the condition of the economy. The slowing of the American economy will reduce the demand for steel and the slowing world economy should force steel prices down. China is likely to cancel its export tax in the second half of this year, increasing market supply.
www.kommersant.com
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Photo: Sergey Veniavsky
