NORDIC STEEL PRICE FORECAST - FLAT PRODUCTS

The MEPS Nordic Average Hot Rolled Coil transaction value remained stable over the summer months as market activity was low. Some price weakening is beginning to set in as inventories and imports are high. This is forecast to result in lower figures for period four agreements.

In the New Year, Hot Rolled Coil transaction numbers are predicted to rise as mills attempt to pass on increases in raw material costs. We expect the largest of these gains to be recorded in the second quarter of 2008 as the anticipated upsurge in iron ore prices comes into effect. This could result in values surpassing the previous peak reported in December 2006.

The MEPS Nordic Average Hot Rolled Plate transaction figure has also been relatively steady since July. Imports are on the decline and demand is strong. This is expected to continue in the medium term and, along with rising production costs, should help push prices higher into the second quarter of 2008.

Source: European Steel Review Supplement by MEPS (International) Ltd.