A number of factors are at work driving such rapid growth. Firstly, strong real demand continues in many important emerging countries. Inventory rebuilding has also occurred in several industrialized nations after the production cuts in 2005. Finally, rising raw material input costs have prompted customers to order in advance of steel price hikes - creating an exaggerated market for steel products.

MEPS expects 2007 to show further advances in supply. But the rate of growth is likely to moderate from the levels of recent years. A period of inventory drawdown is anticipated in many of the industrialized nations.