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News Release from: MEPS (International)
Edited by the Manufacturingtalk Editorial
Team on 27 August 2007
EU steel prices remain high In spite of
imports
EU steel prices continue at record levels - almost disregarding the 'flood' of steel products arriving into Southern Europe from China.
Last year represented the onset of greater global competition as China became a substantial net exporter of steel In 2006, the US recorded high levels of imports from China
This article was originally published on Manufacturingtalk on 9 Oct 2006 at 8.00am (UK)
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However, this year, the EU has taken a larger share of Chinese exports as the US Dollar weakened significantly.
EU carbon prices showed slight signs of 'softness' through the Winter of 2006.
This was short lived as the beginning of 2007 marked the start of further rises.
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Selling values continued to climb above record levels almost disregarding the 'flood' of material arriving into Southern Europe from China.
The Chinese government's efforts to curb exports by eliminating the VAT rebate and introducing a tax levy on some products has not, so far, stemmed the volume of steel leaving the country.
There was a rush to export before the deadlines for the measures occurred.
This led to a build up of cheap imported material which has caused carbon prices to weaken in recent months.
However, no significant falls have, as yet, transpired.
The MEPS Composite All Products Carbon Steel Price surpassed the previous peak of last year and still remains above that point, despite the recent softness in transaction prices.
In September 2006, the figure stood at EUR 571/tonne.
By May 2007 the value had risen to EUR 607/tonne demonstrating an increase of more than 6% above the previous peak.
The majority of the rise came from long products, where the MEPS EU average price grew by almost 14% between September 2006 and May 2007.
This was fuelled by surging demand from the construction sector, particularly in the Middle East, along with higher scrap costs.
However, most long products have recently shown signs of weakness as scrap values reduced.
We expect further declines over period four due to the seasonal slowdown.
Flat product numbers have not shown the same volatility as long products.
Over the past twelve months, the MEPS EU Flat Products Price has, on the whole, remained above the EUR 600/tonne level with July 2007 transaction values being similar to those seen a year ago.
This is forecast to continue in the longer term as demand stays firm.
A slight seasonal slowdown is, however, anticipated towards the end of this year.
Steel values are expected to recover early in 2008.
Demand is likely to increase and imports should be lower by the start of the New Year.
The Chinese government is asserting that it will curb exports of energy intensive products.
If it successful, a sharper upturn in prices could be seen.
* Source - MEPS European Steel Review.
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