Asian prices have not moved up as much as those in the EU but they are now closer to US values — with the gap between the two reducing by around $US85 per tonne since July last year. However, the price differential with the EU has increased by more than $US30 per tonne. This has caused a shift in Chinese exports away from the US and into Europe.

Asian transaction figures continue to lag those of the other two regions. Growing Chinese exports are keeping carbon values in check. This scenario is forecast to persist in the long term as Chinese capacity expands further. Prices in Asia have been strong since the third quarter of 2006. The MEPS Asian Average Composite All Products Carbon Steel Price has increased by around 10 percent, or $US50 per tonne. Values for flat and long products have both shown healthy growth, adding around $US45 and $US65 per tonne, respectively.

A slight weakening of prices is predicted towards the end of this year across Asia. This is due mainly to a decline in the flat products sector, brought about by oversupply in the Chinese market. Long products' values should hold up over period four as both scrap costs and demand remain high.

The MEPS EU Composite Price surpassed its previous peak in May this year by more than $US90 per tonne as transaction figures continued their upward trend. Values still reside above that level, despite recent softness. Long products have been the main contributor to rising numbers as strong demand and escalating scrap costs pushed prices higher. Transaction values are expected to record a slight seasonal downturn over the Winter months before recovering through the first half of 2008.

North American figures indicate a different trend over the past twelve months, with prices being more volatile. In 2006, imports from China were greater. Large volumes saturated the US market, forcing mills to make production cuts towards the end of last year in an attempt to restore the supply-demand balance. This was, however, not enough to avoid a sizeable fall in transaction values. The MEPS North American Composite Price subsequently moved down by approximately 12.5 percent.

The largest reduction was recorded in the MEPS North American Flat Products price, which decreased by around 15 percent. As scrap costs climbed early in 2007, transaction values improved for all categories except Electro-Zinc. However, the recovery was short lived as numbers have, once again, fallen in recent months.

The MEPS North American Composite Price reached a peak in April of this year, but did not achieve the record levels recorded in the Summer of 2006. Values are now forecast to recover in the fourth quarter of this year and into 2008.

 

Source:  The above article was taken from INTERNATIONAL STEEL REVIEW from MEPS (International) Ltd . For further infomation, please visit: www.meps.co.uk