It will come as no surprise to manufacturers who have seen costs soar that a study by Global Insight Inc., an economics consulting firm, identifies China as the "most important factor" behind recent steel price increases.
"Explosive growth in the Chinese steel industry has produced physical tightness worldwide for the range of steel-making materials, lifting input prices on a global basis. This is a permanent change and will affect markets for decades," says the study, which was done for the Association of Equipment Manufacturers, the Farm Equipment Manufacturers Association and the North American Equipment Dealers Association. China accounts for nearly one-third of global steel consumption and production and accounts for more than 50% of market growth, the study notes.
Less predictable is what the study says about India and steel prices. "The most important medium-term factor is the probable rise of India. Just as China dominates current analysis, India could soon enter a growth pattern and provide a second dose of strong growth to steel demand."