05 October 2005
Global steel prices will be lower in 2006 and shortages are unlikely, a US economist has predicted.
But there will be no early return to the low prices of the 1990s and first three years of this decade, according to John Anton, director of the steel service at Global Insight, a Washington DC-based consultancy.
"Steel costs will be lower [in 2006]. I can almost guarantee it," said Anton in a speech at the ProcureCon conference in Arizona.
New mining capacity, rather than declining demand, was the reason. Demand had grown by 9 per cent a year since 2001, and was likely to slow but not crash.
Anton said steel prices, which in some cases tripled in 2004 after a long downward trend, had risen higher than could be justified, hence recent falls. He forecast that prices would decline again in 2007 and rise slightly in 2008.
He said that in 10-15 years, the number of big steel producers would be similar to the number of aluminium firms, with about a dozen controlling as much as 80 per cent of global supply.