MEPS - CARBON STEEL PRICE FORECASTS FOR AUGUST 2004

WORLD AVERAGE CARBON STEEL PRICE FORECAST

We still believe that the short term prospects for modest price improvements in the flat products sector are good. We do, however, anticipate a slippage around the turn of the year as the current tight supply situation becomes much easier. We are already seeing evidence of the beginning of a much more relaxed attitude to pricing in global export markets. This should filter through into domestic pricing over the next few months.

The decline in long products demand from China has generated more availability in global markets. This leads us to the conclusion that average world prices in mid 2005 will be lower than current figures.

EU AVERAGE CARBON STEEL PRICE FORECAST

Demand remains firm for most flat products and is expected to continue to be quite solid for several months ahead. However, we believe that new agreements in early 2005 for deliveries in the second quarter of that year will be at reduced levels. Further decreases are anticipated as the month's progress.

We still believe that we are approaching peak values for most long products in the EU market. Possibilities exist for small increases in September as the building and construction segments operate at reasonable levels of activity. However, as the Winter approaches, we expect prices to slip during the first half of 2005.

NORTH AMERICAN CARBON AVERAGE PRICE FORECAST

Despite a strong market situation in the region we still believe that the boom conditions in the flat products sector will last only until the end of the year. A price reduction is anticipated through the first half of 2005. High oil prices are reducing sentiment for a vibrant recovery in the near term. Regional production is rising which should ease the shortages. Competition from foreign mills will increase as the price differential with the rest of the world in exploited.

We do not anticipate any upward movement in long products' transaction prices in the near term. In 2005, we expect a slow but steady price decline.

ASIAN AVERAGE CARBON STEEL PRICE FORECAST

We maintain our view that in the flat products sector there are prospects for further modest price improvement in average domestic values up to the end of the year. The gains for hot rolled coil could be slightly above those anticipated last month due to a rally in local Chinese prices in recent weeks.

MEPS still forsee a slight price deterioration of the average long product values across Asia, after the turn of the year. The potential for oversupply is still apparent, particularly with the prospects of a slowdown in the Chinese construction segment.

Source: MEPS - STEEL PRICES ON-LINE (regional steel price tables & forecasts)