UNITED STATES HAS BECOME A MAGNET FOR
GLOBAL STEEL EXPORTERS – MEPS INTERNATIONAL LTD
According to MEPS regional steel price trends have
diverged over the past twelve months. Selling values in North America have been
strong, whereas those in the EU and Asia have come under negative pressure.
In North America, we have witnessed a number of exceptional factors during the
last year, including unplanned outages and weather-related disruptions to raw
material and steel deliveries. These have resulted in tightened supply and
extended delivery lead times. Consequently, local mills have been able to push
through a series of domestic price rises.
European and Asian steelmakers have, predominantly, failed to lift selling
figures because of falling input costs, subdued demand and increased
As a result, there has been a substantial differential between North American
steel prices and those in the rest of the world. Major exporters have taken note
of this and attempted to sell their material into the region.
Data from ISSB indicates that US imports of all steels have risen by around 30
percent in the first six months of 2014, on a year-on-year basis. The increase
for flat steel products has been more pronounced at approximately 45 percent
over the same period.
Many steel buyers in North America have seen the potential to lower their costs
and opted to bring a greater portion of their steel from overseas. However, this
situation has not gone unnoticed. The US steel mills and their related
associations are calling for measures to protect the local industry.
Although overseas material has been very competitively priced, possible
protectionist moves by the US government have created a great deal of caution
amongst both traders and potential customers regarding forward ordering of
material from third countries.
We believe that prices in EU and Asia will reach the bottom in 2014, after three
years of declines. A modest rise in demand should help to boost selling figures
next year. Economic conditions should improve marginally. However, iron ore
costs will remain subdued but other input expenditure could grow.
In contrast, a slight downward price correction is envisaged in North America
following a strong 2014. Nevertheless, our prediction is for the discrepancy
between North American and global selling values to remain substantial compared
with past trends.
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