INTERNATIONAL
STEEL PRICES - LATEST MARKET ROUNDUP FROM MEPS
This
article has been extracted from the April 2005 issue of MEPS International
Steel Review
FLAT PRODUCTS
US transaction prices are
still trending downwards. Mills are reducing production or bringing
forward maintenance outages in the face of high service centre
inventories. Some manufacturing activity has also declined. However,
import volumes are reducing because the weak US Dollar has removed
any price premium for overseas suppliers. Additionally, freight
rates remain high. This augurs well for the domestic mills. Canadian
business is slow. Producers have tried to hold the line on prices
but volumes are dropping fast and some further discounting has taken
place. Inventories are lower now. Import offerings are limited, at
prices only about $C20 per tonne under domestic ones.
Speculative purchasing appears to have
halted in China. Local prices have dropped back a little following
last month's surge. We have no information to suggest that the
Japanese mills' demands for a ¥10,000 per tonne hike for April/June
deliveries to service centres has yet been implemented. The arrival
of offshore tonnage is starting to impact on the general market.
Stocks of imported steel at the ports, at end February, rose by 3
percent compared to January.
Contract business is strong in South Korea
but the distribution sector remains sluggish. CSC has successfully
introduced higher prices for the first quarter in Taiwan. Direct
business with auto companies, shipbuilders and electrical appliance
makers is healthy. However, resale values are stagnant because of
insufficient demand and the availability of cheap imports.
Several EU mills are cutting finished
production in response to weaker consumption and high supply chain
inventories but it is not clear to what extent, and when, this will
help stabilise prices. Some producers are talking about new
increases for the third quarter which could be around €30 per
tonne. It is too early for the market to consider them at the
moment.
In Poland, export business is being
hampered by the relative strength of the Zloty against the Euro. The
market is quiet as domestic steel demand reacts to a slowdown in the
general economy. The overall scenario in the Czech/Slovak Republics
has weakened recently. There is growing concern that inventories are
becoming overfull. Mill order books are less strong than of late.
All talk of higher prices in period two has ceased.
LONG PRODUCTS
Although, for the moment, US
prices are flat, a seasonal pick up in construction activity and
inventory reductions should help the mills to implement higher
prices in the near future. Our Canadian figures are unchanged.
Business, which had slowed due to the harsh Winter weather and
imports arriving in late December 2004, is slowly starting to
recover.
The Chinese government has approved a
proposal to abolish the 13 percent tax rebate on billet exports from
April 1, in order to curb the expansion of steel production.
Construction steel product prices are once again on a downward path.
Japanese activity is beginning to show some positive signals for
seasonal reasons.
Declining building investment continues to
badly damage South Korean demand for long products. Taiwanese
business is slow but the relentless escalation in regional scrap and
raw material values has allowed the mills to push through a number
of price rises this month. However, Chinese imports may soon begin
to pose a threat to market stability.
The weak price tendency continues
throughout Western Europe. Construction activity has not fully
recovered from the severe Winter conditions that swept across the
region during March. For similar reasons, Polish inventories are
still inappropriately high to the detriment of mill prices. The
Czech/Slovak market is also overstocked. There is very little
optimism for a near-term recovery.
