Monday, January 28, 2008

Meps EU price forecast -flat products

The MEPS EU Average Hot Rolled Coil transaction value moved down in January. Slow buying activity continues to depress local figures. However, imports are expected to reduce over the coming months. This, coupled with rising input costs, is forecast to cause transaction prices to increase once again.

The MEPS EU Average Cold Rolled Coil transaction figure also decreased this month. However, a rise in demand is anticipated ahead of sizeable raw material cost increases in April. Availability of cheap foreign material is also likely to be limited in the short term. As such, cold rolled coil values are expected to recover over the next few months.

European mills will attempt to recover the higher cost of raw materials by pushing through significant selling price advances during the second quarter. Rises of over 10 percent are predicted by the Summer, as new iron ore and coal contracts force producers to gradually increase transaction figures further. Recent changes to export taxes in China should drive EU import prices upwards. This is expected to support the upsurge in transaction values as the import threat reduces. Consequently, hot rolled coil prices are forecast to move above previous record highs, topping €530 per tonne in the third trimester. Due to weaker market conditions, cold rolled coil figures are forecast to remain below the prior peaks in recent years. Values for both products are expected to soften in the second half of this year as the weaker economic climate dampens buying activity.

Source MEPS European Steel Review


No comments: