North American Steel Prices May Have Peaked

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By Chris Shaw

Following what was a slow summer in terms of construction activity steel industry consultant MEPS suggests steel prices in the North American market have reached a peak, though it expects prices to remain at around current levels in coming months.

This is especially so for plate prices, which it expects will stay strong for another few months as delivery lead times have been extended and the market continues to look solid. This is a reflection of the fact that while imports from Asia are increasing, this increase will largely be offset by a number of planned outages at US mills.

Once US production returns to more normal levels towards the end of the year the impact of higher imports will begin to be felt though, with MEPS anticipating prices will begin to move lower and continue such a trend into 2007. Such an outcome may already be underway in strip mill prices, as MEPS suggests they peaked in July.

Helping prices move lower is the recent weakness in scrap metal prices, a trend MEPS also expects will continue in coming months. Timing for a turnaround remains uncertain, though MEPS is anticipating the second half of 2007 is likely to offer improved conditions as construction activity is expected to begin showing signs of strengthening, especially as weather conditions are expected to become more favourable by that time.

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