This year's MEPS German Hot Rolled Coil average price is forecast to be 10 percent above the 2006 figure. This will be a new record high and the first time the annual value will top €500 per tonne. Over the course of 2008 the figure is predicted to move up another 2.5 percent to above €520 per tonne.
The quarterly average Hot Rolled Coil transaction value for fourth quarter business is expected to drop by 4 percent compared to the previous period. Negative pressure set in due to weak demand and excessive inventories. Consequently, customers delayed purchasing, forcing mills to reduce prices to generate orders. Imports continue to arrive, which is depressing the market further.
Mills are likely to push for rises ahead of the implementation of the new iron ore contract in April 2008 but these are not expected to take hold initially due to reduced demand. Customers are forecast to begin restocking during the first quarter of next year. This should support transaction price advances through the second and third trimesters. However, as a result of continued import pressure and a weaker economic climate, these increases could be only modest. A seasonal downturn is anticipated in the final period as year end de-stocking reduces buying activity - thus causing prices to fall.
No comments:
Post a Comment