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WORLD STEEL PRICES TO RISE FURTHER BEFORE ENDING THE YEAR DOWN
The MEPS World All Products Steel Price was in decline through January and February. A pick up occurred in March and is likely to continue into the third quarter before drifting downwards by the end of the year and beyond. This is the prediction developed from the new range of data produced for MEPS steel prices on-line. Regional product price indices have been extended to give flat and long product average values. Further extrapolations have been made to provide 'World All Products' values each month free of charge. Forecasts are available on subscription. In recent years, steel consumers and producers have wanted easily accessible, independently researched, steel price indices covering all the major product forms in the key regions of the world. The MEPS on-line steel prices have filled the void and been particularly useful for many main contractors and sub contractors involved in major construction projects around the world. They are being used in setting a measurement for fluctuations in steel prices in large contracts. They can also be utilised for futures contracts. There is undoubtedly a stock overhang in Europe and North America. However, the strong markets in Asia lead us to believe that global prices will continue to be quite strong - at least in the near term. Our projections indicate that World All Products Steel Prices will end the year below the values at the beginning but are a long way from falling off a cliff. The tendency for long products should equal that for flat, partly because of raw material considerations. Rises in the cost of iron ore, coking coal and energy are making HBI/DRI and pig iron more expensive. Scrap availability is quite inelastic on the upside. Consequently, the price of scrap is already showing signs of recovery. Couple this with an improvement in demand for construction steels in the Northern Hemisphere as Spring and Summer approaches and the scrap price is likely to expand. The World Long Products Price should grow steadily into the third trimester. In flat products, with the possible exception of plate, steel prices look to have more downside over the next few months. Markets in Europe and North America appear closer to their peaks. Asia is perhaps less so. Detailed regional analysis indicates that the World Average Flat Product Steel Price, currently at $US719 per tonne, will retreat less than 2 percent by the end of the year. Source: MEPS - International Steel Review & MEPS Steel Prices On-Line
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