Monday, October 22, 2007

EU Steel Price forecast from MEPS


The MEPS EU Average Cold Rolled Coil transaction value dropped this month due to weakening demand. Figures are expected to fall through the remainder of the fourth quarter as mills cut prices to attract orders. Service centres will continue to reduce inventories.

The MEPS EU Average Hot Dipped Galvanised transaction figure has also moved down in October, falling by approximately 5 percent. This was partly due to a decrease in the extras, which reflected a drop in zinc costs. Values are forecast to decline further in the near term.

The price differential between hot dipped galvanised and cold rolled coil has reduced significantly this year. It has more than halved since March from almost €180 per tonne to just over €80 per tonne. We do not envisage this figure moving back up to previous levels in the near term as zinc prices are well below the highs recorded in 2006.

No meaningful rises in transaction figures are forecast until the end of the first quarter for both products. EU producers will attempt to push through price increases at the beginning of the New Year. However, customers are likely to resist these initially and as such values should climb quite slowly for the first few months. The second period of 2008 is then expected to record the largest gains as mills try to recover escalating raw material costs.

Source: MEPS - European Steel Review - click here for a free July 2007 sample copy

Click here for MEPS EU Average Steel Prices

Technorati Tags: , ,

No comments: