Many metal stampers, especially smaller ones, are unable to pass steel price increases on to their customers, or only at certain, negotiated times. Therefore, highly volatile steel markets really hurt their bottom line. The fact that steel is still expected to rise for the rest of this year is bad news for the little guys. If in fact, there is a peak coming soon, that’s good news in the middle term, and perhaps some people will be able to set prices there at the peak and ride the down side a bit to improve profitability. But such market timing is hard for stampers, since market speculation isn’t really their forté
Transaction figures are expected to continue climbing in September due to higher raw material costs. However, we predict that the latest increases will signal the peak of the current cycle in western countries as reduced consumption negatively affects demand on the mills. Low construction activity is expected to result in continued cautious buying by service centres. They also fear being left with overpriced material when values begin to fall.
The weakening economies in the EU and North America will, almost certainly, result in reduced demand in the near term from the manufacturing and building industries. Credit constraints are also expected to limit purchases, particularly from smaller customers. Consequently, selling figures are forecast to soften towards the end of the year.