Source: steelguru- 10 Aug 2007
MEPS said that the recent introduction of the levy on certain steel exports from China is now limiting supplies although arrivals into the EU in June were significantly up as traders anticipated the action. It said that low prices in North America are already keeping Far East exports at bay but demand has been poor and the loss of exports and new capacity has created an oversupply in a number of product categories in China.
MEPS said "In the flat products category, we foresee the world average flat products price drifting lower over the next few months. Inventories are likely to remain excessive up to the start of the final quarter in all regions. In the US a price recovery is anticipated as supply and demand rebalances. EU figures should stabilize in the near term but could decrease further as the inventory depletion phase continues. Oversupply is likely to continue in Asia for the remainder of the year - keeping prices low. A price recovery is forecast in the EU in 2008 when the inventory reduction has been completed. North American values are expected to continue their recovery. A modest rise is anticipated in Asia as the mills try to recoup higher input costs."
MEPS added that "In the long products sector, we predict reasonably stable pricing conditions over the next few months in all regions. However, in the final quarter and into the early part of 2008, we forecast further declines in North America and EU for seasonal reasons. Asian values should pick up marginally as construction revives."
MEPS concluded that price increases are forecast for all regions in the early part of 2008, pushing up the world figure slowly as input costs are likely to increase and modest demand improvements are anticipated.