After average increases of 8% in 2007 that followed increases in 2006, steel prices are on the way up again. Baosteel Group, the largest steel producer in China, took a 65% increase in iron ore prices from their major supplier in Brazil. It's not clear yet how this will affect steel prices, but it can't be good. Although this is a global issue, it is magnified in China because of the growing demand for steel mainly in the domestic market.
Here are three articles on the situation:
http://www.redorbit.com/news/business/1200056/steel_prices_expected_to_increase_in_2008_consumers_could_see/index.html
http://www.reuters.com/article/rbssIndustryMaterialsUtilitiesNews/idUSSHA35825820080220
http://money.cnn.com/news/newsfeeds/articles/newstex/AFX-0013-23210344.htm
We were hoping for less pricing pressure in 2008 for our customers. Unfortunately that doesn't look like it will be the case.
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