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News Release from: MEPS (International)
Edited by the Manufacturingtalk Editorial
Team on 05 June 2007
World all carbon steel products price
moves higher
Latest forecasts from MEPS concerning the 'World (Global) - All Products Composite Carbon Steel Price' showed it moved higher during May, 2007, while flat products prices fell in some regions.
The 'MEPS - World all products (global) price' moved higher in May as anticipated The figure for long products was marginally above our expectations
This article was originally published on Manufacturingtalk on 9 Oct 2006 at 8.00am (UK)
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In contrast, flat product prices in North America fell by 2% in difficult market conditions.
EU values eased downwards - with few deals concluded.
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Asian numbers rose.
We retain our forecast of slow but steady improvement in the world average price over the next three months.
Higher export prices from China, for a number of products, have prompted us to extend this period of growth into the final quarter of the year.
The Chinese price rises should reduce competition somewhat in most domestic markets around the world.
Consequently, our forecast for late 2007 and early 2008 has been upgraded.
However, we still believe that selling values will slowly decline in the final six months of the forecast period as oversupply develops, particularly in China.
* EU - All Products Composite Carbon Steel Price - the MEPS - EU all products price increased in May by EUR 2/tonne - marginally below our expectations.
This was the result of a slightly lower gain in the flat products segment because virtually all deals for the second quarter were completed in the previous month.
Our twelve month forecast is little changed from the April prediction.
We anticipate flat product prices moving up slowly over the next few months as agreements are made for deliveries in the third quarter.
Supply and demand should remain in reasonable balance since third country import offers are still quite uncompetitive.
However, long product prices are likely to reduce somewhat now that scrap costs have started to decline.
Oversupply is likely to develop in the Chinese market later in the second half of this year.
The introduction of the export levy has prompted us to upgrade our forecast from September onwards.
However, a decline is still anticipated in 2008 as market supply becomes excessive and the construction boom eases.
* North America - All Products Composite Carbon Steel Price - the MEPS - all products price in May was marginally below the figure in the previous month.
The flat products average declined but the long products value increased.
Market conditions in the former classification are weak with poor domestic demand and high inventories relative to consumption.
In the latter category, activity is brisk and mill order books are firm.
Import volumes are reasonably steady for most products due to weakness in the US dollar relative to most other currencies.
We forecast a slow but steady erosion of the MEPS - all product price over the next few months.
Scrap costs are in decline and should have a negative impact up to mid year.
With weakening domestic prices for most products, the North American market is becoming less attractive to foreign producers.
The premium over Asian supplies is eroding.
Moreover, EU domestic values are substantially above North American figures and are likely to remain that way for several months forward.
With a much reduced import threat North American prices could start to expand in the second half of 2007 and into 2008.
* Asia - All Products Composite Carbon Steel Price - the MEPS all products figure climbed again in May in line with our predictions.
The introduction of an export levy by the Chinese government should lift the price of supplies to Japan, South Korea and Taiwan in the coming months.
Domestic values in China are likely to weaken as export volumes decline and oversupply develops from new capacity coming on stream.
The net result of this new situation is likely to be positive for Asian average prices.
Consequently our forecast has been uprated.
We still believe that excess supply will develop within the forecast period but price erosion is not likely to occur until the turn of the year.
Moreover, it will probably be quite modest because we should still see improvements in demand for steel products across most of the region.
* Source - MEPS Steel Prices On-line.
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