Steel prices, which have fallen in the UK by up to 35% over the past year, could start to recover in the second half of 1999, industry analysts claimed this week.
‘We think a price recovery is in sight because of recent production cuts and the fact that inventories are reducing,’ said Philip Tomlinson, director of steel analysis at CRU International.
Steel prices have plummeted over the past year as economic collapse in the Far East, Russia and Latin America has led to a surge in imports into Europe.
World steel production is forecast to fall this year by 2% to 756 million tonnes, according to industry analyst MEPS. ‘We believe the first half of 1999 will be a very difficult period for the European mills, with steel manufacture down 7 million tonnes on its 1998 level,’ MEPS said. But it anticipated a ‘modest improvement’ in the second half.
Pedro Ortun, the European Commission’s basic industries minister, urged steel producers to improve competitiveness by restructuring, modernising, spending more on R&D and concentrating on value-added products.