Steel prices have almost doubled in the past year as steelmakers have passed on big increases in the costs of iron ore and coking coal 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 elsewhere in Asia and in the Middle East.
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: "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."