Earlier this year, BEAMA’s Steel Products Group warned about the possibility of ‘turbulent’ steel raw material price rises and the prospect of a patchy supply situation.
Now a new report (EEF steel market update, March 2010) states that world demand for steel during this year is expected to be restored to 2008 levels.
A spokesperson says this confirms BEAMA’s earlier fears, commenting: “Although demand in Europe is picking up, it is the emerging nations of China, India, Iran and some North African states, which are anticipated to consume far more steel.
“The pace of demand in these countries has hardly slackened. At one stage, China is estimated to have been producing 50% of the world’s steel supply.
“This will affect the domestic re-stocking pattern as the 2010 season contract negotiations progress. Already, there are signs of price volatility in coal, coking coal and crude steel - the raw ingredients.
“In 2009, UK steel imports fell more dramatically than sales, pointing to considerable de-stocking in the supply chain. In a market no longer seen as prime, it is the speed of re-stocking this channel, in the correct qualities, that may cause the difficulties we envisage.
“With steel suppliers seeing their margins squeezed in Europe, and where the UK is not considered a preferred market for imports from outside the EU, there’s likely to be a time lag in the supply situation. This will allow price rises to hold.
“Once again we feel it appropriate to repeat our January 2010 message – that customers can help themselves by buying from reputable wholesalers, anticipating project requirements, advance ordering, confirming actual prices prior to despatch, and by being aware prices may rise.
“Our members - manufacturers of steel cable tray, ladder, support systems and trunking - are reassuring customers they are doing everything possible to get supplies through the distribution system on time, and at the most competitive prices.”