INTERNATIONAL STEEL MARKET ROUNDUP - MARCH 2005
10 March 2005 - MEPS (International)

Flat Products

Conditions in the US market are largely unchanged. High stock levels at the
distributors, sluggish demand as manufacturing slows and easy availability
of both imported and domestically produced material are causing local mills
to discount transaction prices. It is difficult to foresee a quick recovery.

Activity is down in the Canadian market. Customers appear to be very
cautious about placing orders. Inventories are high and consumption could
remain dull for the next six weeks or so. Transaction values are suffering a
negative trend.

Chinese business has been relatively quiet over the last month because of
the extended Lunar New Year holiday, prior to which companies were loathe to
build up inventories. Nevertheless, prices are still firm and showing an
upward tendency.

Although Japanese supply is easier now, thanks to imports, Nippon Steel
Corp. has announced price hikes of ¥10,000 per tonne for April strip
shipments to the distribution sector. The company has also started
negotiations with contract customers. Stocks of imported steel at the ports,
at end December, rose by 3.4 percent compared to November.

The South Korean market is expecting Posco to lift domestic prices towards
the end of February or early in March as a result of strong contract
business. However, inventories at the distributors are currently on the high
side, making the resale scene sluggish.

Taiwanese business has been disrupted by the Chinese New Year holidays and
flat product values are virtually unchanged this month. Most local service
centres expect that domestic producer, CSC, will soon announce a substantial
price hike for second quarter shipments due to soaring raw material costs.
The steelmaker has already raised export figures for February/April
deliveries.

The EU strip mills continue to show strong resolve on prices in the face of
very thin first quarter order books, brought about, in the main, by
customers concentrating on liquidating their overfull inventories.
Nevertheless, buyers negotiating deals during the last four weeks have, in
several instances, secured prices slightly below those tabled in our last
issue.

In Poland, prices and volumes of most flat products have improved a little
from January levels. The Czech mills still have good export order books
which should help to keep domestic values firm. Producers are likely to lift
prices in period two.

Long Products

Plummeting scrap costs have caused US mills to reduce their raw material
surcharges. However, these decreases have been largely offset by hikes in
basis values, leaving transaction figures virtually unaltered. Canadian
selling prices have not changed despite a rather dull construction scene.

The Chinese long product market has remained basically steady in the
Guangzhou area with just slight fluctuations in price for certain products.
Demand reduced substantially over the Spring festival. Moreover, the
government in the region has recently carried out an examination of key
projects, leading to a further drop in sales. Most dealers have an
optimistic attitude for business after the holidays, partly because
inventory levels are somewhat lower than those noted during the past few
years.

Japanese building is relatively slow for seasonal reasons. The South Korean
long products market is weak as demand continues to contract. We can detect
no improvement in Taiwanese construction activity. The civil engineering
segment has been particularly hard hit.

Selling values in several EU countries have been suffering some erosion but
are now stabilising. As raw material costs, especially scrap, are on the
rise in February, there is some talk of increases in long product prices but
this has not yet happened. In Poland, seasonal price weakness has continued
into February. High inventories have been carried over from last year. The
onset of Winter weather has also impacted on selling values of bar and rod
products in the Czech and Slovak Republics.

Source: MEPS International Steel Review

http://www.meps.co.uk

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