ASIAN AVERAGE CARBON STEEL PRICES - LATEST FORECASTS FROM MEPS

May month-on-month (year-on-year) percentage changes:

All Products Composite Price: +5.6 (+32.4)

An increase of approximately $US40 per tonne was recorded in the MEPS – Asian All Products Composite steel price in May. Advances were noted in both flat and long categories this month. Traditionally stronger construction activity helped to lift selling figures this month. Export opportunities remain low, partly due to unfavourable exchange rates with the west.

A modest increase in the Asian all products composite transaction value is anticipated in June. However, this is expected to be near the peak of the current price cycle. The deteriorating financial situation in Europe is likely to weaken market sentiment in Asia during the second 2010. A potential cut in Chinese export tax rebates could re-direct large volumes of steel back into the domestic market. Nevertheless, an increase in iron ore and coking coal costs for third quarter contracts should help to buoy Asian average steel prices in the short term. A decrease in raw material costs is forecast in the final trimester. This will, almost certainly, push steel selling figures lower towards the end of 2010.

A recovery in transaction values is predicted to occur after the Chinese New Year. Demand is likely to strengthen as the economic climate improves. However, any new measures taken by the Chinese government to restrict activity in the construction industry could limit the size of the steel prices rises.
 

Source: MEPS Steel Prices Online                      MEPS - Asian Carbon Steel Prices