US producers have rolled over October values during recent settlements. Their order books are described as "in good shape". Inventories at distributors and O.E.M's have declined, although service centre business is only steady. There are few third country offers as the weak US dollar continues to hold imports at bay and encourages domestic steel-makers to export. Several major mills have announced strip mill price hikes of $US30 per ton, effective January 2008, even though the October one has not been fully implemented.

Canadian pricing continues to be undermined by the strong domestic currency, adequate or slightly bloated service centre inventories and weak demand from the main consuming industries. Moreover, as the year end approaches, customers are reluctant to enter 2008 with any surplus stock. Third country imports remain low, helping to keep local steel mill activity at reasonable levels.The strengthening Yuan, together with changes to the export tax system, has led to a loss of export business for the Chinese mills. At the moment, domestic flat product prices are largely unchanged with good demand and low stock levels. Increases in input costs are likely to encourage producers to push for higher prices in the coming months.Although Japanese mills have started to limit output of building related flat products, price hikes remain difficult to secure. Total domestic stocks of coil held by steelmakers and service centres, as end September, fell by 1.2 percent compared to August - the first drop in three months. However, quayside inventories of imported flat products jumped by 6.5 percent in the same time frame. Demand from the major manufacturing sectors is still firm and steel export markets are active.Sales have strengthened in South Korea where flat product prices are stable this month. As expected, Taiwanese mills continue to implement increases, in line with the growing costs of production. Chung Hung's domestic list for November indicates price hikes of between $NT300 and 500 per tonne. For shipments overseas, rises of $US10/20 per tonne were announced for uncoated coil.

Producers in Poland have yet to indicate their price intentions for the start of 2008. Due to competitive imports as well as continuing high inventories, they have been forced to offer further discounts for late fourth quarter business. Growth in industrial production continues apace in the Czech Republic and Slovakia. Both producers and customers are keeping stocks under control. The market, so far, has not been troubled by large quantities of imports. Our tabled figures are a little lower than a month ago, partly because some contracts are made in Euros and both the Czech and Slovak currencies are very strong at present.

West European producers are more optimistic for the first half of next year, hoping that escalating raw material costs will help to boost market prices. So much will depend on third country import pressure. Underlying demand appears to remain strong. There are some positive indications for local mills. Chinese export prices are rising. Furthermore, negotiations for annual contracts with the auto sector are likely to result in higher figures.

 

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