Pricing volatility likely to persist: Plummer

May 07, 2012 | 01:48 PM | Corinna Petry

Tags  AMM Automotive Metals Conference, Chris Plummer, Metal Strategies, corinna petry

DEARBORN, Mich. — The global steel supply chain is affected by so many unpredictable factors that volatility is almost a certainty in the near term, according to an industry consultant offering a broad global forecast at AMM’s 5th Automotive Metals Conference in Dearborn.

Christopher Plummer, managing director of West Chester, Pa.-based Metal Strategies Inc., cited China’s influence on the seaborne metallurgical coal trade, Turkey’s sway over the ferrous scrap trade and Europe’s sovereign debt crisis as key issues.

Structural changes affecting the global market have caused prices to stay high, and observers are increasingly concerned about government actions such as tariffs, export bans, super-profit taxes, mining royalties and environmental regulations, Plummer said. These changes have forced mining companies to spend more time and capital developing products, which in turn has caused higher prices for iron ore and coking coal. As raw materials make up 65 to 75 percent of total steelmaking costs, that increase reverberates throughout the entire supply chain, he said. ....