In July 2008, prices of basic metal products were 5 percent up on one year ago. For the fourth month running, market prices have risen and prices of basic metals – in particular iron and steel – have reached an unprecedented level.
Prices basic metal products (index)
Iron and steel prices 13 percent up
Market prices of primary iron and steel have soared in recent months. In July 2008, prices of these metal products were 13 percent up on one year previously, whereas early this year they were 5 percent cheaper than one year ago. Prices of iron and steel pipes and tubes and other iron products show a similar trend.
Price increases are partly attributable to revised iron ore contracts and higher coal prices, which are both of vital importance for the production of iron and steel. A limited number of large companies dominate the sector and account for 80 percent of total global supply of iron ore. They have forced up the prices of their annual contracts for 2008. Import prices of coal have also rocketed by 80 percent relative to a year ago.
Iron and steel prices (index)
Modest effect on derivative product groups
Changes in the prices of raw materials have a modest effect on extensively processed basic metal products. The price fall of primary metals in the second half of 2007 and early 2008 is reflected in modest price increases for derived steel products. After the recent price increases for primary iron and steel, prices of steel products, machinery and other equipment have risen somewhat more sharply.
Prices of steel machinery and equipment have been very stable with an annual peak in January. A part of these products is subject to price revisions only once a year.
Prices metal derivatives (index)