NORTH
AMERICAN AVERAGE CARBON STEEL PRICES
- LATEST FORECASTS FROM MEPS
Over the past four weeks, the mills in the
flat products category have been able to capitalize on the fear of
shortages and high input costs. With weakening export markets for
scrap we predict an easing in the price through October onwards. As
a consequence, steel prices could fall in the final few months of
this year and into 2006. However, Spring should bring in better real
demand and rising steel prices.
We should point out that there are several
factors at play which could upset forecasting at this time. The fall
out from Hurricane Rita could create further uncertainties and
extend the high price regime into 2006. Such a situation would
probably lead to an upturn in import volumes and a subsequent
negative pressure on prices in the Spring of 2006.
The dynamics in the flat products segment
apply equally to long products. The impact has, in fact, been more
pronounced. The MEPS Average
Long Product Transaction price in September was above peak
values in 2004. The fear of shortages in the short term after the
recent hurricanes is propping up prices. We expect average values to
remain at figures above the levels recorded this Summer well into
2006. Demand for reconstruction should keep overall consumption
quite solid. Moreover, government spending on the infrastructure
should be filtering through to the steel market soon.
We are assuming that any rapid boom in
steel prices in this segment will be held in check somewhat by a
substantial rise in imports - particularly from Asia and South
America where overcapacity is prevalent.
