For now, global steel prices appear to have found a continuing balance, as supply and demand forces have achieved equilibrium.

 

Locally, prices are stable as well, but the health of our region could lead to local mills increasing pricing if West Coast economies continue to improve.

 

Globally, while the past five years have been marked by wild swings, the last year and a half has seen those swings moderate. The biggest reason for this change is the slowdown in developing world growth, especially China. It has been this "new" demand from the developing world that has played havoc on steel markets in recent years, much as it has with other commodities.

 

As this demand cools, so too does steel price volatility.

 

What does the future hold for global steel prices? Again, the answer to this question lies outside North America and in the developing world.

 

If the current cooling trend is a mere blip to a long term trend of hectic growth, steel prices could jump upwards again very soon and very dramatically.

 

If the current developing world slowdown deepens and cannot be reversed with government priming, we could see a continuation of the current equilibrium.

 

Locally, supply and demand pressures can have their own impact on steel pricing.

 

For example, many eastern regions of North America have seen prices rise substantially over the last quarter, due to the heavy demand from the resurgent automobile industry and the construction boom in Ontario.

 

Here in the West, regional mills have now moved above 80 per cent of their capacity. If the economies of B.C., Alberta, Saskatchewan and the North West U.S. states continue to improve, we expect to see mills serving this region to increase pricing to meet the demand pressure.

 

Norm Streu is the president and chief operating officer of the LMS Reinforcing Steel Group. He is a former chair of the Vancouver Regional Construction Association and a member of the Journal of Commerce Editorial Advisory Board.