EU AVERAGE CARBON STEEL PRICES
- LATEST FORECASTS FROM MEPS
The mood in the flat products market has
developed an even more negative tone. Very few deals had been
concluded for the third quarter when we undertook our research in
the first two weeks of June. The mills were forced into conceding
discounts on previous selling values in an effort to obtain the few
orders available for deliveries at the second trimester. The
increasing volumes of imports earlier in the year have offset the
production cuts undertaken by the domestic mills.
End users and distributors continue to be
over stocked. The volume of orders to be placed for delivery in
period three 2005 will be substantially lower than in the same time
span a year earlier. The market is likely to continue to be in
excess for most of the next six months.
The MEPS
Average Flat Products Price has dipped sharply this month.
As a result, our forecast for the next twelve months has been
downrated. We do, however, believe that the bottom of this cycle
will occur in Springtime 2006. An upturn in prices for hot rolled
coil is anticipated in negotiations in April. Cold rolled and coated
product rises are expected to follow slightly later. Recovery for
commercial grade plate may take a little longer.
EU long product prices continue to
decrease, following the fall in scrap values. The market is quiet.
There is also pressure in several member states from third country
imports. The June reduction in the MEPS Average Long Products Price
was quite dramatic. The impact was felt across all product forms but
was most noticeable in structural sections and wire rod. Bar product
prices were less seriously damaged.
Our forecasts have been downgraded this
month for all product types. Scrap prices are likely to continue to
slip in the medium term due to the over supply situation in Asia and
the production cutbacks in the EU and US. Modest price gains are
anticipated in mid year for wire rod and reinforcing bars as the
building sectors improve for seasonal reasons. We expect Spring 2006
to be the next significant upturn in the EU long products segment.
