Analyst: Steel prices to stay stable for rest of 2009

- Wednesday, February 18, 2009

Analyst: Steel prices to stay stable for rest of 2009

In spite of the complicated outlook for Colombia's steel market after prices fell abruptly in late 2008, steel is expected to stay stable for the rest of this year.

"The outlook through the end of the year is for steel prices to stay stable. At the very least, no additional downturns are expected," analyst with Stanford Bolsa y Banca, Edgar Jiménez, told BNamericas.

Jiménez said that when prices fall, supply also drops and causes a price reaction.

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He added that the market will also benefit from the depreciation of the Colombian peso versus the US dollar since it offers producers the possibility of seeing favorable prices on the international market.

"They have got the best of both worlds now because the peso is very weak," he said.

In a recent report, UBS bank warned of the risk that steel prices would continue to fall in Latin America in Q2 considering the absence of a demand lift and because production has not responded rapidly.

"The ongoing risks to demand come from the loss of purchasing power by consumers," the bank said.