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Rail News: Mechanical

Rail-car market update: Plate, flat-rolled steel product prices to be cut in half next year, Rail Theory Forecasts says


The price of plate and flat-rolled steel products used by North American rail-car builders will drop up to 50 percent next year, according to market analysis and rail industry forecasting firm Rail Theory Forecasts.

Yesterday, the company released its projection, which is based on a correlation of factors that led to this year's price increases and recent industry forecasts for those factors in 2005.

"Since the steep escalation of rail-car prices in 2004 has not constrained orders for new cars this year, it cannot be automatically inferred that new freight-car prices will decline in 2005," said Rail Theory Forecasts President and Progressive Railroading columnist Toby Kolstad in a prepared statement. "But past experience would lead one to expect the builders to pass most of the savings in material costs to the buyers."

However, cast product prices will remain high because of the scrap metal shortage and limited domestic manufacturing capacity, the company predicts.

Rail Theory Forecasts publishes the "North American Freight Car Market," a survey of rail-car traffic and construction, and analysis of economic factors affecting the railroad industry.