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Home > MEPS Steel News - 03.10.2013


US activity levels are relatively quiet, as is the norm at this time of year. However, market sentiment has deteriorated. Rising import volumes and domestic capacity coming back on stream could lead to oversupply. Consequently, downward price pressure could ensue. Certainly, the recent upward trend has ceased and some small decreases have been noted.

Order intake at the Canadian mills has softened but, for now, producers are holding the line on prices. Customers expect discounting to commence quite soon. Inventory levels are fairly low, with service centres only purchasing what they can move. Distributors report that demand is still uncertain but that their resale margins have improved slightly. Buyers are not particularly interested in imports because of the long delivery lead times and large tonnages required.

In China, an upward price tendency was apparent throughout August and into early September. Since then, some softness has developed and sentiment has weakened, despite the fact that downstream industry is recovering. Steel output began to increase in late August, leading to climbing inventory levels.

The Japanese economy is in recovery. Orders from the manufacturing sector are expanding and steel stock levels are coming down. Steelmakers have started to push for higher prices to cover their escalating costs of production. Overseas business picked up again in August, despite poor economic circumstances in Europe, a lack of demand from key customers in the Asian region and overcapacity in China.

The South Korean domestic steel market continues to be lacklustre, with no improvement foreseen during the remainder of this year. Export business is still slack. Moreover, the depreciation of the Japanese yen has hurt Korean exporters. The local steelmakers have been unable to hold on to some flat product prices during recent settlements.

Strip mill product selling values have moved up in Taiwan during the summer. The country’s largest producer, CSC, has decided to lift most of its official domestic list prices for October/November deliveries as raw material costs surge. Manufacturing production and exports of finished goods are steadily reviving. The fourth quarter is, traditionally, the peak season for steel consumption. In addition, several mills will carry out maintenance, thus reducing availability.

Source: MEPS International Steel Review

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