MEPS WORLD COMPOSITE STEEL PRICE AT A NINE-MONTH HIGH IN DECEMBER
An upturn in steel prices in North America and the
European Union at the end of the year, pushed the MEPS world composite benchmark
steel price to its highest level since March.
US demand for flat products is stable but expected to show some signs of growth
shortly. Inventories throughout the supply chain are tightly controlled at a low
level. Ex-mill transaction values have continued to escalate over the last
month. Producersí scrap costs are also rising. With good order books for the
first quarter 2014 and extending delivery lead times, the steelmakers may well
endeavour to hike prices further in the coming weeks.
In Canada, mill rolling schedules are reasonably full with order placement now
well into February. Transaction figures are firm and, in some cases, above those
of the previous month. However, at the service centres, demand is still
inconsistent. It is a struggle for them to pass on all the mill increases to
resale customers, who are only purchasing what they currently need, rather than
rebuilding stocks. Nevertheless, buyers believe there is still room for further
The recovery in the Japanese economy continues, leading to healthy and growing
steel consumption. Producers are slowly, but surely, securing their proposed
price rises. Inventories held by dealers are now well controlled. Export figures
are also moving up, helped by the weak yen, although volumes have fallen as
demand in key Asian markets is dull. The depreciated currency is also
discouraging cheap imports.
The basis increase scheduled by the West European flat products producers for
the first quarter 2014 has not been secured for January production. Demand
remains slow across the region. Negotiations for the remainder of period one are
ongoing. Long product prices have advanced slightly as the mills take advantage
of upward scrap movements.
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