2005 -- A repeat of 2004?

For the present, WSD is placing these odds on the steel pricing outlook:

-- The steel sheet shortage intensifies in the first quarter of 2005. (Odds = 60%).

-- The steel shortage goes away starting in the second quarter of 2005. (Odds = 70%).

-- Even assuming that world steel export prices drop sharply after the first quarter of 2005, they decline less than one would expect in a "death spiral" environment - i.e., the hot-rolled band price at the low falls "only" to $350-425 per tonne rather than $275-300 per tonne - because raw material prices don't ease as much as in the past (a phenomenon we witnessed in the second quarter of 2003). (Odds = 60%).

-- There is more downside "stickiness" in some home-country steel sheet markets than traditionally has been the case. (Odds = 90%).

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