Product category:
Engineering Industry Reports and Surveys
News Release from: MEPS (International)
Edited by the Engineeringtalk Editorial
Team on 09 May 2005
US steel prices continue to fall
According to the latest market roundup of international steel prices from MEPS, in flat products US transaction prices are still trending downwards.
According to the latest market roundup of international steel prices from MEPS, in flat products US transaction prices are still trending downwards Mills are reducing production or bringing forward maintenance outages in the face of high service centre inventories
Some manufacturing activity has also declined.
However, import volumes are reducing because the weak US dollar has removed any price premium for overseas suppliers.
Additionally, freight rates remain high.
This augurs well for the domestic mills.
Canadian business is slow.
Producers have tried to hold the line on prices but volumes are dropping fast and some further discounting has taken place.
Inventories are lower now.
Import offerings are limited, at prices only about C $20 per tonne under domestic ones.
Speculative purchasing appears to have halted in China.
Local prices have dropped back a little following last month's surge.
MEPS has no information to suggest that the Japanese mills' demands for a Y 10,000 per tonne hike for April/June deliveries to service centres has yet been implemented.
The arrival of offshore tonnage is starting to impact on the general market.
Stocks of imported steel at the ports, at end February, rose by 3% compared with January.
Contract business is strong in South Korea but the distribution sector remains sluggish.
CSC has successfully introduced higher prices for the first quarter in Taiwan.
Direct business with auto companies, shipbuilders and electrical appliance makers is healthy.
However, resale values are stagnant because of insufficient demand and the availability of cheap imports.
Several EU mills are cutting finished production in response to weaker consumption and high supply chain inventories but it is not clear to what extent, and when, this will help stabilise prices.
Some producers are talking about new increases for the third quarter which could be around Eur 30 per tonne.
It is too early for the market to consider them at the moment.
In Poland, export business is being hampered by the relative strength of the Zloty against the Euro.
The market is quiet as domestic steel demand reacts to a slowdown in the general economy.
The overall scenario in the Czech/Slovak Republics has weakened recently.
There is growing concern that inventories are becoming overfull.
Mill order books are less strong than of late.
All talk of higher prices in period two has ceased.
Although, for the moment, US long product prices are flat, a seasonal pick up in construction activity and inventory reductions should help the mills to implement higher prices in the near future.
MEPS' Canadian figures are unchanged.
Business, which had slowed due to the harsh Winter weather and imports arriving in late December 2004, is slowly starting to recover.
The Chinese Government has approved a proposal to abolish the 13% tax rebate on billet exports from 1st April, in order to curb the expansion of steel production.
Construction steel product prices are once again on a downward path.
Japanese activity is beginning to show some positive signals for seasonal reasons.
Declining building investment continues to badly damage South Korean demand for long products.
Taiwanese business is slow but the relentless escalation in regional scrap and raw material values has allowed the mills to push through a number of price rises this month.
However, Chinese imports may soon begin to pose a threat to market stability.
The weak price tendency continues throughout Western Europe.
Construction activity has not fully recovered from the severe Winter conditions that swept across the region during March.
For similar reasons, Polish inventories are still inappropriately high to the detriment of mill prices.
The Czech/Slovak market is also overstocked.
There is very little optimism for a near-term recovery.
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