If you are planning to buy steel in surplus, now is the chance to do so as it will be a buyers market for steel through the rest of this year and into 2010, analysts say.
That's the forecast John Anton, steel analyst at IHS Global Insight, provided during a special webcast at a Purchasing's online community.
Steel prices could hit bottom in the next month or so, Anton said. But he sees no general recovery this year.
Steel and Construction Materials Analyst Timna Tanners, of UBS Investments, agreed, but added that prices could be volatile, though they would not rally above 10 per cent by the end of the year.
She said demand is down about 40 per cent and that inventory destocking is contributing to the weakness in steel markets. Both analysts agreed that the auto industry is nearing bottom in activity. But, said Tanner, automotive only accounts for about 15 per cent of the steel demand.
Construction, which accounts for about 40 per cent of demand, will be negative for the next year or two, she said.
Anton added that construction will decline further until mid 2010 and that decline will negate gains in manufacturing.