RISING SENTIMENT IN ASIAN STEEL MARKET - MEPS
Chinese domestic prices rose steadily from mid January up
to the commencement of the week-long Lunar New Year festivities which started on
February 10, despite a pre-holiday lull in activity. The economy is reviving due
to recent government measures. The steel market was also buoyed by the early
announcement that major producer, Baosteel, was electing to lift official flat
product ex-works prices for March – the fourth consecutive monthly increase. The
proposal reflected the steelmaker’s higher raw material costs as well as
improved order intake from end-users.
Export markets continue to be a challenge for the Japanese mills but the weaker
yen should start to help overseas sales of both steel and finished goods.
However, those same currency movements are also making imported raw materials
more expensive for the producers. They have made concerted efforts over the last
month to lift selling values of flat products, with some success. Demand from
the vehicle and shipbuilding sectors, together with the industrial machinery and
equipment manufacturers, continues to be slow but sales to the construction
sector are improving.
Activity in South Korea’s key consuming industries of automotive, construction
and shipbuilding is dull at present because of the global economic crisis.
However, inventories continue to be run down, albeit quite slowly. Import
volumes are also dropping as Chinese mills put up their price offers.
Taiwanese market sentiment continued to improve before the Lunar holidays. CSC’s
plan to lift domestic list prices for March shipments by an average of 3
percent, compared to the January/February period. This has led to upward
movements in the marketplace. The steelmaker cited higher iron ore costs and
restocking as the main reason for the change.
Source: MEPS - International
Also See: MEPS - Asian
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