Government spending restrictions in western nations are expected to continue to limit infrastructure and construction activity. Furthermore, concerns are developing over a slowdown in Chinese demand. Moreover, buyers across the world are likely to remain cautious about rebuilding inventories. However, we do expect some degree of restocking next year. Consequently, the average steel price in 2014 is forecast to be above the year earlier figure.
A reduction in iron ore costs is anticipated over the medium term. This could limit the prospects for steel price rises. Nevertheless, domestic mills will, almost certainly, attempt to push through advances in selling figures in a bid to recover profitability as demand levels grow. MEPS, therefore, envisages an uptrend in average annual steel transaction values through to 2016.