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Home > MEPS Steel News - 20.12.2013

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 price improvements.

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.

Source: MEPS International Steel Review

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