NORTH AMERICAN STEEL PRICE FORECAST - FLAT PRODUCTS

As predicted, the MEPS North American Average Hot Rolled Coil transaction figure climbed upwards this month. The inventory drawdown is all but complete, which prompted buyers to return to the market. Further increases are forecast as buying activity picks up into the New Year.

The MEPS North American Average Cold Rolled Coil transaction value also moved up during October at a similar rate to the hot rolled figure. The price differential between the two products fell to a three year low of less then $US40 per tonne in May 2007 after reaching its highest point for four years at the end of 2006. The cold rolled premium has now been relatively steady for the past four months at $US55/60. Although it still remains below the average of recent times, we do not envisage it rising over the forecast period because cold rolled coil demand continues to be weak.

Transaction figures for both products are expected to escalate well into the second quarter of next year as raw material costs increase and customers rebuild depleted inventories. Due to a weaker US economy, values are not predicted to reach record highs in 2008.

Source: MEPS - International Steel Review - click here for a free September 2007 sample copy

Click here for MEPS North American Average Steel Prices