Steel prices have almost doubled in the past year as steelmakers have passed big increases in the costs of iron ore and coking coal on to consumers.
The jump threatens to create fresh problems for manufacturers and stoke inflationary pressures in emerging markets where demand is high, driven by urbanisation in China and infrastructure spending in the Middle East and elsewhere in Asia.
It comes as the London Metal Exchange starts trading steel futures on its floor today after trials on its Select electronic system. The launch could help drive trading volumes far higher.
Prices for steel billet, used to make reinforcing rods in construction and a benchmark for the industry, have surged this month to $900 a tonne, almost double in the past year.
Michael Shillaker, steel analyst at Credit Suisse, said: “Steel demand is booming across emerging markets due to growing infrastructure requirements.
“There is a shortage of upstream steel capacity which, combined with higher raw materials costs, should ensure that demand and prices remain high for several years.”… [emphasis added]
Inserted from <FT>
Once upon a time, the US was the steel capitol of the world providing low cost, high quality product for the world. Thanks to free trade, rather than fair trade, policies of the last 20 years, I question whether we have the production capacity to rebuild our own infrastructure. Steel is not the only thing going up.
Oil prices hit an all-time high near US$120 a barrel Monday after a weekend refinery strike closed a pipeline system that delivers a third of Britain’s North Sea oil to refineries in the U.K.
The shutdown comes amid other supply outages in Nigeria that have helped to support oil against a strengthening dollar.
“We’ve got a confluence of a number of events that have really disrupted crude oil supply,” said Victor Shum, an energy analyst with Purvin & Gertz in Singapore. “That’s what’s driving oil to a new record even though the U.S. dollar actually strengthened a bit.”
Light, sweet crude for June delivery rose to a record US$119.93 a barrel in electronic trading on the New York Mercantile Exchange. The contract eased back to US$119.40 a barrel by midday in Singapore, up 88 cents from Friday’s close of US$118.52… [emphasis added]
Inserted from <IHT>
When Texas Torquemada took stole office in 2001 the price of oil was $31 a barrel. That’s an increase of 387%. I bet the Crawford Cronies are celebrating this news. McConJob wants more tax breaks for the oil companies.
