STEEL PRICE INCREASES CHECKED IN MOST PARTS OF THE WORLD

US strip mill product transaction values are relatively stable with just some minor upward movement. This follows several months of escalation, much of which was driven by the mills’ climbing raw material costs. Recently, however, producers have made no more formal announcements regarding further increases, at least for the immediate future. Inventories at service centres and end-users remain on the low side because buyers are cautious about ordering too much material at what is likely to be the top of the market.

Transaction hikes proposed for May shipments are being implemented by Canadian steelmakers as demand is high and input costs continue to grow. Order intake at the mills remains good but a number of buyers are now purchasing more carefully in anticipation of stable or weakening prices in the next few months.

Over the past four weeks, China’s local market prices have posted an upward movement amidst good levels of activity. Baosteel has elected to cut its official May ex-works figures. This is the first time the steelmaker has implemented a reduction since September 2010. A number of other, smaller producers have chosen to keep their numbers basically unchanged for April.

The supply/demand situation for flat products is still uncertain in Japan. End-users are trying to ascertain the output capabilities of steelmakers who have yet to get production back to normal following March’s earthquake and tsunami. The implementation of the integrated mills’ proposed ¥20,000 per tonne hike for April has been postponed for now. The advance was planned to help recoup their surging outlay on raw materials.

After a great deal of stalling, South Korea’s Posco finally announced on April 19 that it intends to lift the domestic list prices of most products quite sharply. This, the first official change to selling values since mid-2010, was widely anticipated by market players because of rises in the cost of raw materials.

The direction of the west European market is slightly negative, with lacklustre demand and the increasing presence of third country suppliers whose offers are more attractive, thanks to the weakness of the US dollar. Buyers are ordering only their minimum requirements as they adopt a “wait and see” attitude. However, inventories are thinning out and many service centres will need to purchase shortly.

Source: MEPS - International Steel Review - click here for a free sample copy.

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