This
article has been extracted from the February 2005 issue of MEPS International
Steel Review
FLAT PRODUCTS
Conditions in the US market
are largely unchanged. High stock levels at the distributors,
sluggish demand as manufacturing slows and easy availability of both
imported and domestically produced material are causing local mills
to discount transaction prices. It is difficult to foresee a quick
recovery.
Activity is down in the
Canadian market. Customers appear to be very cautious about placing
orders. Inventories are high and consumption could remain dull for
the next six weeks or so. Transaction values are suffering a
negative trend.
Chinese business has been
relatively quiet over the last month because of the extended Lunar
New Year holiday, prior to which companies were loathe to build up
inventories. Nevertheless, prices are still firm and showing an
upward tendency.
Although Japanese supply is
easier now, thanks to imports, Nippon Steel Corp. has announced
price hikes of ¥10,000 per tonne for April strip shipments to the
distribution sector. The company has also started negotiations with
contract customers. Stocks of imported steel at the ports, at end
December, rose by 3.4 percent compared to November.
The South Korean market is
expecting Posco to lift domestic prices towards the end of February
or early in March as a result of strong contract business. However,
inventories at the distributors are currently on the high side,
making the resale scene sluggish.
Taiwanese business has been
disrupted by the Chinese New Year holidays and flat product values
are virtually unchanged this month. Most local service centres
expect that domestic producer, CSC, will soon announce a substantial
price hike for second quarter shipments due to soaring raw material
costs. The steelmaker has already raised export figures for
February/April deliveries.
The EU strip mills continue to
show strong resolve on prices in the face of very thin first quarter
order books, brought about, in the main, by customers concentrating
on liquidating their overfull inventories. Nevertheless, buyers
negotiating deals during the last four weeks have, in several
instances, secured prices slightly below those tabled in our last
issue.
In Poland, prices and volumes
of most flat products have improved a little from January levels.
The Czech mills still have good export order books which should help
to keep domestic values firm. Producers are likely to lift prices in
period two.
LONG PRODUCTS
Plummeting scrap costs have
caused US mills to reduce their raw material surcharges. However,
these decreases have been largely offset by hikes in basis values,
leaving transaction figures virtually unaltered. Canadian selling
prices have not changed despite a rather dull construction scene.
The Chinese long product
market has remained basically steady in the Guangzhou area with just
slight fluctuations in price for certain products. Demand reduced
substantially over the Spring festival. Moreover, the government in
the region has recently carried out an examination of key projects,
leading to a further drop in sales. Most dealers have an optimistic
attitude for business after the holidays, partly because inventory
levels are somewhat lower than those noted during the past few
years.
Japanese building is
relatively slow for seasonal reasons. The South Korean long products
market is weak as demand continues to contract. We can detect no
improvement in Taiwanese construction activity. The civil
engineering segment has been particularly hard hit.
Selling values in several EU
countries have been suffering some erosion but are now stabilising.
As raw material costs, especially scrap, are on the rise in
February, there is some talk of increases in long product prices but
this has not yet happened. In Poland, seasonal price weakness has
continued into February. High inventories have been carried over
from last year. The onset of Winter weather has also impacted on
selling values of bar and rod products in the Czech and Slovak
Republics.
