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News

Global flat steel products see 3.3% price rise, but China and Turkey buck the trend

MEPS (International) : 06 April, 2011  (Special Report)
Flat product steel prices around the world rose this month. The increases were attributed to the high cost of raw materials. However, real demand has not improved and many customers have been unwilling to accept the large mill list price hikes. Out of the 28 countries MEPS (International) Ltd. conducts price investigations for, only China and Turkey recorded negative selling figures in March.
US flat product transaction values continued to climb, despite the lack of any significant improvement in consumption. Producers are still announcing increases which they claim are based on the surging costs of raw materials. However, service centres are questioning how much longer these levels can be maintained. Supply in the Canadian market is tighter and domestic values are more robust.

Chinese selling figures continued the negative tendency that began in mid-February. Several domestic producers have elected to cut their official April ex-works figures due to weak downstream demand and high inventories. In Taiwan, selling figures are rising as a result of the high cost of inputs and the appreciation of the local currency versus the US dollar.

Market sentiment was strong in Japan before the earthquake. However, suppliers and end-users suffered damage as a result of the disaster and activity levels have fallen back as a result. Consumption is dull in South Korea, where consumers and traders are eager to minimise their inventories. Posco has been reluctant to try to recover growing production costs by means of domestic hikes in period one.

There is something of an impasse in the west European market as customers prefer to sit on the sidelines rather than place business at the inflated levels being demanded by the domestic producers. Many companies have stocks that are adequate for now.

Prices for flat products in the Nordic region continued to rise in March, albeit by considerably less than in the previous month. Domestic mills are seeking further advances, claiming that despite recent hikes they still have little profit margin.

Eastern European producers continue to defy customers' wishes for price stability as they pursue further escalation. However, activity levels are relatively slow and purchasing is being kept to a minimum.

In India, procurement activity has been weaker than expected. Demand for flat products remains uncertain and negative price expectations persist. Demand for steel products in Turkey remains frail. Effective transaction values softened in March. Producers have faced stiff price competition from distributors.
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