Thursday, August 20, 2009

World steel prices: price recovery in the medium term

A few steel industry colleagues have been asking the team how we see world steel prices evolving in the medium term. In reply, looking the world economic picture as well as at probable raw material price developments, our assessment is that:

- steel prices will remain at H1 2009 levels for the next 6-9 months … meaning we see steel prices as essentially stable to Q2 2010;

- we then see prices recovering slowly. We predict a price recovery from Q2 2010 of perhaps 40% across the following two years [to mid-2012];

- we see further recovery of world steel prices to around 50-60% above Q2 2010 levels in 2013-2014.

This means therefore that (in our view) steel prices will take a little while [maybe 3 years or so] to recover to their end-2007 / early 2008 level, but that we do not foresee a return to the extraordinary prices levels of mid-2008 for some time.

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