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News Release from: MEPS (International)
Edited by the Manufacturingtalk Editorial
Team on 02 August 2007
Global sheet/coil steel prices decline
Two recent MEPS International steel reports focus on declining steel sheet and coil prices, while North American long product prices are fairly static for now.
Global Sheet/Coil Steel Prices In Decline Two recent MEPS International steel reports focus on declining steel sheet and coil prices, while North American long product prices are fairly static for now Transaction values for flat products in Canada continued to edge downwards during July
This article was originally published on Manufacturingtalk on 9 Oct 2006 at 8.00am (UK)
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Demand is weak, with buyers reluctant to commit to forward orders as they concentrate on reducing stock levels.
The continuing strength of the Canadian dollar is also impacting badly on pricing as US mills are actively selling across the border at competitive rates.
Import volumes from elsewhere are still low.
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Price movements for strip products are showing a negative tendency in China, due to a slowdown in demand and increased supply to the domestic market following the export tax changes.
Sales have yet to show signs of improvement, despite the price decreases.
Inventories of strip mill products are on the rise in Japan, where demand from machinery manufacturers and building construction is down on last year.
Consumption by white goods and auto makers remains good, in spite of slower sales of cars to the home market.
Total domestic stocks of coil held by the steelmakers and service centres, at end May, climbed by 2.9% - the third consecutive monthly advance.
Quayside inventories escalated by 1.9% in the same time frame.
Due to maintenance work during the third quarter, South Korea's Posco will significantly cut export quantities of strip mill and plate products.
Threatened strike action by the country's Metal Workers Union is unlikely to have much impact on steel output but could affect auto production.
Demand is described as 'stagnant' in the Taiwanese market at present.
It is expected to pick up again in September/October when a round of new government spending begins.
In general, prices remain at the higher numbers established last month for period three deliveries.
Poland's economic growth continues apace, driven by private consumption and investment.
Business is also going well in the Czech/Slovak markets, despite the onset of the holidays.
There is no real pressure from steel imports.
Stocks are below average levels but there are no shortages.
The price trend continues to be positive.
In Western Europe, higher inventories have led to subdued demand for period three.
Although third country imports are not so aggressively priced at present, ArcelorMittal has changed the plan to lift strip prices by EUR 10/tonne.
The company has announced that prices will be left at the second trimester level and that supply will be cut by 3 to 4%.
Salzgitter was looking for a EUR 15/tonne rise and Corus was talking about 5 to 12%.
However, MEPS research has shown either flat pricing or negative movements in all the countries reviewed (Source: MEPS International Steel Review).
* North American long products prices - the MEPS North American Average Rebar figure moved down slightly this month.
This was in line with MEPS' expectations as demand remained strong.
In the short term, rebar values are expected to hold up as scrap prices continue to show no signs of movement.
New import licences suggest that volumes are set to rise over the next few months.
This should put greater pressure on quarter four transaction figures.
The first half of 2008 should then see a revival in prices as buying returns ahead of increased activity in the construction sector.
The MEPS North American Wire Rod value showed no change this month.
The market continues to be firm as imports currently do not pose much threat.
Wire Rod transaction figures have surpassed that of Rebar over the last few months, standing approximately US$30/tonne above rebar prices.
Wire rod numbers have risen more than 20% since the beginning of the year.
Overcapacity in the Chinese market for both products could result in increased volumes of imports into the North American market through the fourth quarter.
This coupled with the traditional seasonal slowdown over the Winter months is expected to cause transaction values to fall around 5% by the end of 2007 (Source: MEPS Steel Prices Online).
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