Sharp rise in prices of steel products

Prices of steel products produced in and imported into the Netherlands rose strongly in the first six months of 2004. Prices of products manufactured in the Netherlands rose by 12.1 percent, prices of exported products rose by 16.4 percent and prices of imported products by 17.8 percent. Selling prices of steel products manufactured and sold in the Netherlands showed a moderate increase (+ 4.9 percent).

Prices of steel and steel products in the Netherlands (2000=100)

Cause and effect

The strong economic growth in China has pushed up demand for steel and the raw materials for steel (iron ore, coal) on the world market. This in turn has pushed up prices on the world market.

The consequences of the strong price rises in the Dutch steel industry on the Dutch producers’ prices index (PPI) for the total manufacturing industry remain small, as steel products account for only 3.4 percent of all manufactured products in the Netherlands.

Steel products imported into the Netherlands make up 4.8 percent of total imports of manufactured products in the Netherlands

Share of import prices for steel products in the PPI (2000=100)

Contribution of steel prices to PPI

If prices rises in the steel industry are left out of account, prices of products manufactured in the Netherlands would have risen by 3.9 percent in the first half of 2004. When steel products are included, the increase in prices for the total manufacturing industry is 4.2 percent.

The effect of the increase in Dutch import prices of steel products on the total PPI is significantly larger. If the developments in prices of imported steel products are not included, import prices of manufactured products rise by only 0.9 percent. If steel products are included, prices of imported manufactured products rise by 1.8 percent.

Corien Ooms