NORTH AMERICAN COMPOSITE STEEL PRICE FALLS FOR THIRD CONSECUTIVE MONTH

The MEPS North American average composite steel price decreased by almost 5 percent in July. This is the third successive monthly decline and, at $US899 per tonne, it is $US115 below the high point recorded in April.

Last month, the onset of the summer lull in market activity resulted in reduced sales volumes by the steelmakers. Mill delivery lead times shortened with some products being available at very short notice. The growing threat from imports added to the downward price pressure.

Steel values are projected to continue decreasing in the short term as demand softens and new capacity is brought on stream. Poor sales volumes throughout the supply chain, coupled with reduced raw material costs, are forecast to add to the negative movement in selling figures. Nevertheless, the size of the price declines is expected to slow due to low inventory levels in the market.

Service centres are likely to begin ordering larger quantities of steel towards the end of 2011 for deliveries in the first quarter as they re-fill depleted inventories. Consequently, prices are expected to rebound in the final few months of the year.

Source: MEPS - NORTH AMERICAN STEEL PRICES ON-LINE