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MEPS - International steel market roundup - November 2004
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FLAT PRODUCTS In the US, real consumption remains healthy. However, distributors' inventories are high. Service centres, concerned at holding such expensive stocks, are buying more cautiously. Certainly, all speculative purchasing has ceased. The auto manufacturers have cut back their production and it is expected that demand in the last part of the year will be at lower levels. Market conditions are then expected to pick up in the first quarter 2005. Availability from off shore sources has improved. Domestic transaction prices have softened. Canadian activity is subdued. Published raw material and energy surcharges are likely to go up by $C40 per ton for November. However, due to increased import offerings and the price slippage in the US, these increases will be difficult to realise. Tonnage is arriving from South America, Egypt, Turkey, Taiwan and Russia at values that are still about 10 percent under Canadian mill prices. Service centres with these products are discounting to obtain additional sales. This is normally the factor which creates the downward pricing spiral for local steel producers. Chinese traders are still loathe to place orders with overseas suppliers without careful consideration because international prices are so much higher than those in the domestic market. For the same reason, export volumes are increasing rapidly. The Japanese local market is quite strong and this is helping to offset a recent fall off in export business, particularly to South Korea and China. Imports continue to strengthen. Inventories at the docks, as of end August, increased by 4.2 percent, compared with the previous month and by over 30 percent from a year earlier. In the fourth quarter, demand from South Korean machinery manufacturers, electric home appliance makers and auto producers is predicted to rise. The relatively low level of local steel prices compared to international ones continues to keep import penetration under control. In Taiwan, home market prices are still being driven by escalating raw material costs. We can see no significant improvement in consumption. Players are anxious about the situation in China. Although business there has picked up after the long holiday, the prices that Chinese buyers can afford are not attractive. EU strip producers have pushed through their period four price proposals. Orders placed in the last month have been settled at even higher values in several countries. Arcelor is considering raising prices in the first quarter 2005 by 3 to 7 percent, depending on product. Corus and ThyssenKrupp are likely to lift their figures by a similar amount. As a result, EU price levels are nearing our average world market values. This means that we could see an increase in imports in the near future. For the moment, offers from third country suppliers remain limited in most countries. Polish domestic sales are improving in-line with the general economy. Import penetration is modest and price trends remain positive. The fourth quarter is sold out in the Czech and Slovak Republics. Distributors are carrying very little stock. Their margins are good. End users' inventories are also low. Local producers have already announced that prices will be even higher in the next trimester. An amount of 4 to 5 percent is being quoted. Customers will have no choice but to accept the decision. LONG PRODUCTS The commercial construction market is weak in the US. A slide in scrap values caused several mills to lower their raw material surcharges. In some instances, this has not been offset by a similar basis price increase. Canadian building activity continues to slow. We have noted some minor transaction price reductions since September. The construction steel market in the Guangzhou region of China remains basically steady after the long holiday with just some small price fluctuations. However, in other areas of north and eastern China the deterioration was more marked. Investment in real estate continues to slow. The outlook in Japan is optimistic - October/December is traditionally the best quarter for demand from civil works projects. South Korean building output is forecast to become even more sluggish during the final trimester, partly because of deceleration in the real estate market. A continuing drop in public sector works is not helping the situation. Nevertheless, prices for most long products are higher this month, driven by escalating raw material costs. Taiwanese sales are satisfactory. We can detect upward price pressure for most products. Prices have moved up in several EU countries this month. They are expected to increase further as European scrap charges are on the rise again. Polish demand has been strong throughout the peak Summer building period but growth in construction activity is lagging behind many other sectors. Building work continues apace in Slovakia and the Czech Republic. Things are expected to slow at the turn of the year. |
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India Renews the Regulation on Scrap Imports
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The Indian government has recently published a new decree regarding the pre-shipment certificate requirement on scrap imports. As previously reported following the blast that took place at the Bhusan Steel factory in Ghaziabad, Indian government published a new policy for scrap imports. According to the new policy released on October 15, 2004, a pre-shipment inspection certificate for all types of iron and steel scrap imported from war-ravaged countries was required. Although the new regulation caused shortage of subject raw material in domestic market, Indian government has recently decided to broaden the scope of the regulation. According to the new decree, a pre-shipment inspection certificate for all types of imported iron and steel scrap regardless of origin is required. Shredded scrap is exempted from the new regulation. |
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Asian average carbon steel price forecast for October 2004 General News - 2004 November 5 |
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Average prices rose in October in all the flat product categories. The improvements in hot rolled coil/plate and hot dipped galvanised coil were slightly below our expectations. For the other products, ours and the actual figures matched. Over the next two months we anticipate further positive movement in prices. Demand is quite firm. It is difficult to assess the mood in China at the moment and changes in availability could occur quite quickly due to the new import and export situation that is developing. In the near term we envisage average prices in Asia holding up quite well in negotiations into the early part of 2005. Henceforth, a modest slide in prices is forecast as supply catches up with real demand from the market place. The MEPS estimates for long products made for October, last month, matched the outturn in this region for bar and rod products. The $US20 per tonne improvement in reinforcing bars was greater than we anticipated. We maintain our forecasts for most product types. This is for a slow but steady decrease in price over the coming months. The timing of our predicted decline varies, dependant upon the product. Source: MEPS - STEEL PRICES ON-LINE (regional steel price tables & forecasts) |
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North American average carbon steel price forecast for October 2004
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In the flat products category, US distributors are over stocked and all speculative purchasing has ceased. Canadian activity is also subdued. Published energy surcharges are likely to increase in November but these will be difficult to realise. This month's strip mill product prices turned out to be lower than we predicted in September due to a combination of weaker demand in the market, marginally lower scrap surcharges and increased import threat. Auto demand will be reduced up to the end of the year. Better availability of material from offshore sources and Mexico will impact on selling values for the next few months. We envisage further decreases in domestic strip mill prices up to the end of the year and beyond - assuming stable scrap surcharges. Quarto plate prices are also likely to slip but at a much slower rate compared to strip products. Real demand is good. Availability is restricted. The modest decline in price forecast for the next twelve months is the result of the prospects of lower scrap costs and an increase in competition from foreign supplies. The US commercial construction activity is weak in the long products sector. Canadian building activity continues to slow. This is the backdrop for a steady decline in prices in this region for most product categories. Actual transaction prices in October were broadly in line with our forecasts. With decreasing demand through the Winter period, we expect prices to drift downwards - assuming scrap costs remain reasonably stable at current levels. Foreign competition is growing. This will add to the negative pressure on prices. A degree of inventory building is also taking place. Source: MEPS - STEEL PRICES ON-LINE (regional steel price tables & forecasts) This article can be found at http://www.meps.co.uk/steel%20price%20forecast%20na10-04.htm |
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EU average carbon steel price forecast for October 2004
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Flat products steel prices increased in most countries in October. The outturn was generally, above our predictions prepared in September. The mills were able to extract higher prices from customers who came to the bargaining table late for fourth quarter deliveries. We expect agreements in December for first quarter supplies. These will be higher than the figures in the previous trimester. Mill order books continue to be quite solid for both strip and plate products. It is our assessment that the next price rises could be the last in this cycle for the strip mill products. Small price reductions are anticipated when agreements are made for the second quarter. For plate products the market may stay stronger for longer. We do not expect any decreases to be negotiated in this category for, at least, another six months. The key market segments of shipbuilding and linepipe for the oil and gas industries should remain firm. The construction segment is more unsettled. The pricing scene is patchy for long products across the EU member states. Sales to the German construction industry are sluggish and are unlikely to pick up in the near term. The situation in other countries in Northern Europe is similar (excluding the UK). Southern European demand seems to be somewhat better. The products which have associations with the integrated mills (i.e. wire rod and structural sections) indicate reasonably firm pricing tendencies in the short term. In contrast, those served mainly by the electric melting units suffer more from the vagaries of the scrap market and are currently more prone to price deterioration. As a consequence, we forecast prices of reinforcing bars and merchant bars declining steadily through the Winter, before picking up slightly as the construction season improves. Source: MEPS - STEEL PRICES ON-LINE (regional steel price tables & forecasts) This article can be found at http://www.meps.co.uk/steel%20price%20forecast%20eu10-04.htm |
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