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MEPS EU AVERAGE CARBON STEEL PRICE FORECAST FOR JANUARY 2005
In the flat products sector, the January rises in strip mill prices did not live up to expectations. Many buyers found themselves with adequate stocks to meet current demand levels. They refused to accept the target increases set by the large producers for new orders and were only prepared to settle for more modest figures. Hot rolled coil prices slipped marginally as RIVA cut offers by 20 per tonne in an effort to generate demand. Hot rolled plate figures moved upwards but not at the rate we expected. Modest gains were achieved in the cold rolled and coated sectors. For the strip mill producers, this month may prove to be near the peak of this cycle. A slow but steady decline in transaction values is forecast for the remainder of the year - with prices falling by around ?40 per tonne over the next twelve months. Real demand is not likely to be exciting in the period. Hot rolled plate consumption remains firm. Supply is still tight. The price zenith may extend well into the Summer months before drifting downwards. A fall in scrap costs over recent weeks accelerated the decline in long product prices to below our expectations. This month's wire rod and rebar figures were only marginally below our predictions. However, a substantial reduction in scrap surcharges by two of the major players in the market served to reduce this month's values for medium sections. The decline in scrap costs also pushed down merchant bar prices by a substantial amount as customers held back on orders. We expect further modest decreases in the light long product prices over the
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