Home Company Profile Steel Industry Analysis Meps Publications Consultancy Independent Studies
 
MEPS Steel Prices On-line MEPS Steel Reports On-line MEPS Industrial Sector Steel Price Index

Company Profile
Steel Industry Analysis
MEPS Steel Publications
Steel Consultancy
MEPS World Steel Prices
Independent Studies
Request Free Publications
MEPS Index Steel Prices
Steel Statistics
Subscribe to Publications
MEPS Steel News
Industry News
MEPS Sponsored Events
Steel Links
Subscription Rates
Add Link To Website
Content for Websites
Contact Us
Site Map

 

Home > MEPS Steel News - 02.06.2016

GLOBAL STEEL PRICE RECOVERY IS NOW UNDER THREAT

The MEPS world all products composite steel price soared by 13.8 percent, in May - the largest month-on-month increase, in percentage terms, for more than a decade.

In May, global steel values advanced for the fifth month in a row as European and North American selling figures continued to surge, by 19.3 percent and 13 percent, respectively, compared with those in April.

Chinese mill offers, both at home and overseas, continued their upward trajectory in late April but domestic transaction prices started to fall spectacularly, in early May, as local manufacturers ramped up production.

China’s National Bureau of Statistics confirmed that domestic crude steel production has been rising, since March, on a year-on-year basis.

Rapidly increasing domestic steel prices and improved financial results since the start of the Lunar New Year, encouraged Chinese producers to restart idled capacity.

It is widely accepted that underlying demand, in China and worldwide, remains broadly unchanged. Therefore, supply-side factors have been the main driving force behind the rapid rise in global steel values.

If China continues to boost production volumes, it is highly likely that steel selling figures will start to deteriorate around the world.

It is notable that many US market participants argue that Chinese exports only play a relatively minor role, domestically, as just 3 percent of US steel imports were of Chinese origin, in the first three months of this year. However, one US buyer remarked, this month, that if “China sneezes then the world catches a cold”. If Chinese domestic and, more importantly, export prices continue to slide, then no country, including the US, will be immune from the negative price scenario.
 
US steelmakers successfully filed trade cases for a number of flat products, giving domestic producers an opportunity to raise prices with little resistance.

However, market participants have repeated, this month, that if US selling values continue to rise, the domestic producers would “leave the door open” for buyers to find new import sources, that are not covered by trade petitions.

Moreover, if Chinese domestic and export prices continue to soften, other major exporters are likely to follow China’s lead and reduce their selling figures. This would make imports more competitive in global markets.

This may encourage buyers, especially in North America, where prices are some of the world’s highest, to return to purchasing from offshore sources. It would also put a brake on rising domestic selling figures in the near term.

Consequently, with no significant change in global steel demand expected for the rest of 2016, MEPS predicts that some of the price increases secured since the start of the year could evaporate.

Source: MEPS International Steel Review - May 2016 Issue

Free Sample copies of MEPS Reports

 

 

Purchase the latest copy of International Steel Review here

Sign up for free MEPS steel news alerts

Enter e-mail address *Required

Name:      


Company: 
If you are a journalist please tick here: