WORLD AVERAGE CARBON STEEL PRICES - LATEST FORECASTS FROM MEPS

The recent introduction of the levy on certain steel exports from China is now limiting supplies from the country. However, arrivals into the EU in June were significantly up as traders anticipated the action. Low prices in North America were already keeping Far East exports at bay but demand has been poor. In China, the loss of exports and new capacity has created an oversupply in a number of product categories.

In the flat products category, we foresee the world average flat products price drifting lower over the next few months. Inventories are likely to remain excessive up to the start of the final quarter in all regions. In the US a price recovery is anticipated as supply and demand rebalances. EU figures should stabilise in the near term but could decrease further as the inventory depletion phase continues. Oversupply is likely to continue in Asia for the remainder of the year - keeping prices low.

A price recovery is forecast in the EU in 2008 when the inventory reduction has been completed. North American values are expected to continue their recovery. A modest rise is anticipated in Asia as the mills try to recoup higher input costs.

In the long products sector, we predict reasonably stable pricing conditions over the next few months in all regions. However, in the final quarter and into the early part of 2008, we forecast further declines in North America and EU for seasonal reasons. Asian values should pick up marginally as construction revives.

Price increases are forecast for all regions in the early part of 2008 - pushing up the world figure slowly. Input costs are likely to increase and modest demand improvements are anticipated.                                                                                                                  09.08.2007

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