NORTH
AMERICAN AVERAGE CARBON STEEL PRICES
- LATEST FORECASTS FROM MEPS
In the flat products sector, North American
strip mill product prices should be reasonably firm over the next
two months. However, we expect Asian imports to be arriving in large
quantities before the Winter is out. The North American premium over
Asian values is likely to be eroded. We forecast transaction values
in North America falling quite quickly through Springtime and into
Summer. It is possible that the reductions could be hastened by
lower scrap surcharges.
We expect prices to stabilise at their
reduced levels later in the year. We believe that more discipline
will be exerted in the supply situation in Asia as the year
progresses. If not, a wave of antidumping cases will be brought -
thus forcing the issue.
Recently reported price reductions have not
been fully incorporated in our forecasts. The balance of
probabilities lie at 90:10 that our predictions will be on the high
side. The rate of decline could be faster and deeper - given the
widening disparity between Asian and North American values.
Demand for long products should hold up
quite well throughout the whole of 2006. Price reductions are,
however, anticipated over the next few months as extra Asian import
volumes enter the local markets - transforming them into excess with
competitively priced material. At current price levels, freight
costs remain no significant barrier to Asian exporters increasing
sales to this region. As North American prices slide and the premium
declines the quantities of imports should reduce in mid year. This
will probably lead to more stable pricing for most products -
assuming stability in the scrap sector.
