MEPS FORECASTS STEEL PRICE UPTURN IN 2014
Over the past twelve months, international steel prices
have predominantly been on a downward trend. The MEPS Global All Products
Composite figure declined, in the second half of 2012, to an annual low of
$US711 per tonne in November before rising just $US25 per tonne over the next
three months. From the peak in February this year, transaction values fell
almost $US60 per tonne to reach a forty-one month low in July.
Steelmakers in some countries have recently managed to stem the tide of price
declines. Selling figures in the North American strip mill market, which have
been under negative pressure all year, have moved up due to a combination of
tight availability and low inventories. Chinese prices have escalated, driven by
high iron ore costs and an improvement in sentiment. A number of European
steelmakers have announced hikes to their list prices. Consequently, MEPS
believes that modest advances in market values will be recorded in the near
term. However, the upturn in global selling figures is likely to be short-lived.
Demand in Western nations traditionally softens in the fourth quarter.
Consequently, prices are predicted to turn down, albeit only modestly, before
the end of 2013.
A more pronounced recovery in transaction values is foreseen as customers start
to place orders for delivery at the beginning of 2014. Steelmakers are expected
to make output cuts, during the winter. This should lead to more equilibrium
between supply and demand in the new year. Price growth is expected to continue
during the first quarter, supported by anticipated rises in raw material
expenditure which usually take place in this period. The upward movement is
forecast to reverse shortly after as buyers are likely to have finalised the
bulk of their inventory building and production levels could start to outstrip
market requirements. Steel selling figures are predicted to decline as the
summer holiday season approaches.
The annual average Global All Products Composite steel price is predicted to
increase approximately 4 percent in 2014, compared with the equivalent figure in
2013. This rise would bring to an end two years of consecutive declines.
Steel Review also see:
MEPS Steel Price Forecasts to 2017
Free Sample copies
of MEPS Reports
the latest copy of International Steel Review here
up for free MEPS steel news alerts