ASIAN AVERAGE CARBON STEEL PRICES - LATEST FORECASTS FROM MEPS

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

All Products Composite Price: -0.1 (+22.7)

Background:

*The MEPS – Asian Average All Products Composite Steel Price was virtually unchanged in November as reductions in the flat sector were offset by increases in long categories.

*China was the only country in which advances in domestic transaction values were recorded during November. Nevertheless, market sentiment began to slip during the final two weeks of the month.

*Currency exchange rate movements led to rising Asian selling figures when converted into US dollars.

*Inventories in the Asian region remain higher than normal for current market activity.

Short term outlook:

*Prices are forecast to soften over December and January due to continued oversupply across the Asian region.

*Recent strengthening in the US dollar is expected to add to the downward pressure on Asian average selling figures.

*Many traders will be keen to reduce their stock levels towards the year end, limiting sales opportunities for the mills.

*Export demand from western countries is also likely to remain low in Asian.

Medium term outlook:

*Energy saving measures in China, curbing steel production, should help to re-balance supply and demand early in 2011.

*Anticipated increases in raw material costs are likely to push steel prices higher through to the summer of 2011.

*End-user demand is expected to grow, albeit at a slower pace than in 2010, as the economic recovery continues across the region.

*Prices are likely to slip towards the end of the forecast period for seasonal reasons.

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