LATEST SUPPLY/DEMAND ROUNDUP OF HOT ROLLED PLATE FROM MEPS

In West Europe, the divergence between demand in the commodity plate market and that for the higher specifications continues to grow. Despite relatively low stock levels of standard quality grades, buyers are staying out of the market as they anticipate further price reductions. Conversely, producers of the more exotic material are noting increased order volumes for deliveries in the third quarter. Consumption is solid from offshore applications and yellow goods manufacturers. MEPS estimates the output of plate will be up, this year, by 10 percent on the outturn in 2010.

In Japan, sales of plate to the construction industry continue to be weak. However, shipbuilding demand remains buoyant. Plate output is predicted to reach 14 million tonnes this year. Activity at the South Korean shipyards is strong. Mills could lift production by more than 20 percent, year-on-year, due to newly installed capacity.

We anticipate that output in China could expand to over 75 million tonnes in 2011 - a year-on-year rise of almost 10 percent. Further but more modest gains are anticipated in 2012. An additional 100,000 tonnes of plate could be produced by Taiwanese mills this year. We believe this may lessen the need to purchase third country material. Consumption by the building industry has been firm but is now slow for seasonal reasons.

US demand for the higher specifications, for project work, is strong. Shipments of hot rolled plate are projected to expand by 8.7 percent in 2011. Consumption of commodity material has slowed in Canada. Mill business for the more exotic grades is better. There has been little in the way of new import offers but foreign material, ordered earlier in the year, is now hitting the market. Mill supply is forecast to grow by 7.4 percent in 2011.

Source: MEPS - World Steel Outlook - also see MEPS Reports Online