ASIAN AVERAGE CARBON STEEL PRICES - LATEST FORECASTS FROM MEPS

The MEPS – Asian Average Hot Rolled Coil transaction value increased by approximately $US10 per tonne in September 2009. Inventory levels were reasonable with shortages beginning to appear in Japan and Taiwan. This helped to keep the price trend positive. Chinese mills continued with their high levels of production, despite excess stock of this product. Consequently, selling figures in this country reduced. A modest rise was also noted for the MEPS average cold rolled coil figure. Large hikes were recorded for coated material, with prices advancing by over $US50 per tonne. The market was slightly stronger for this category because of increasing demand from the automotive and white goods sectors. Hot rolled plate transaction numbers climbed by over $US15 per tonne this month. However, downstream consumption remained muted.

Asian average transaction values for all flat products are expected to maintain a slow but steady upward path in the short term. Prices in China should start to rise after the national holiday in October. Exports from the latter country are likely to climb as excess material is offloaded into Europe and South East Asia. This should help to ease the oversupply situation. However, growing production in all four countries could slow down these efforts and limit the increases in selling figures during the fourth quarter.

Larger rises are predicted for the first half of 2010. End-user consumption is likely to improve as the world emerges from recession. Government stimulus packages should also help sales to grow further. Nevertheless, the global economic recovery is expected to be slow. However, we do not envisage a return to the previous highs recorded in 2008.


Rebar was the only product to record a decrease in September in the long products sector. A small rise in Taiwan was insufficient to push up the Asian average number, which dropped by $US10 per tonne. Mesh grade wire rod values were relatively stable this month. Sections and merchant bar prices both advanced by over $US10 per tonne over the last four weeks. Bloated stock levels in China damaged the market. There were signs of a revival in the building sector in Japan. However, construction activity across the region remained patchy.

Transaction values are forecast to climb further in the final few months of 2009. Traditionally September and October are peak months for construction and consequently steel demand in China. However, the oversupply situation will, almost certainly, force selling figures lower in this country in the short term. Asian average steel price advances are, therefore, expected to be restricted.

In South Korea, a government stimulus package involving a number of major river projects could well support long product consumption by the beginning of 2010. Demand from other sectors in the region is also likely to pick-up as the economy strengthens further. Consequently, significant transaction price increases are predicted for the first half of next year.

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