I have been reporting over the past few days about price increases in the Steel Industry. these are taking place throughout the world, driven largely by cost increases. The price of iron ore, oil and electricity are driving up manufacturing costs, and the days when the steel industry would absorb these are long gone.
In the UK we typically see a shortage of steel as a prelude to price increases, a situation which exists at this moment. We have seen Corus increase "stock" prices by around £40.00 in the past week.
Increases had been announced in Europe of around €50, before the end of last year, and whilst the steelmakers seem to have been slow to implement this increase it is almost certain, that even more is on the way.
The situation in the UK is made worse by the fact the that sterling has lost some 9% in value against the euro which could add significantly to overall increases. Most of the steel strip imported in to the UK comes from the Euro zone.
Prices in the US have increased significantly during the past month, and the loss of a blast furnace at Severstal will add to price pressures.
If you are a steel consumer who has not faced a demand for price increases yet, don't get too comfortable because they are coming!