US mill transaction prices continue their positive trend. They are being driven by escalating input costs and higher energy and transport charges, rather than any improvement in real consumption. Indeed, demand from a number of major end-user sectors is lacklustre and a good proportion of mill order books are taken up by service centres replenishing the inventories they had allowed to drop to record lows. The steelmakers have announced further substantial hikes for May as they take advantage of the lack of any overseas supply whilst continuing to explore export opportunities.
The Canadian mills report strong order books amidst an overall dearth of import competition. As expected, transaction values continue to advance as delivery lead times move out. Producers have tabled more increases for May. The upward price movement is being propelled by limited supply and higher production costs. Most end-user sectors are sluggish. The strong Canadian dollar is hurting manufacturing industry. Service centres are reducing their inventories as buyers hesitate to purchase at these inflated prices.
Since it was announced that iron ore prices would rise by 65 percent, Chinese mills have sought to lift steel values quite substantially. Japanese producers have tabled advances of ¥20,000 per tonne for April deliveries and may even adjust prices further in the third trimester. Market values have already strengthened considerably in the wake of the announcements, amidst tight supply caused in part by buoyant demand from the auto makers. Although quayside stocks of imported flat products, at the end of February, were barely changed from January, traders fear that the strength of the Yen will encourage more imports during the second quarter. Inventories held by steelmakers and distributors went up in January by 2.4 percent, for the first time in five months, exceeding the 4 million tonnes level which is considered appropriate.
In South Korea, Posco is looking to compensate for huge raw material cost rises, which kick in at the start of April, by ramping up steel prices. Supply is very tight in Taiwan and this, together with robust sales, is helping to push up prices.
The Polish economy maintains its strong pace of growth. This month, ArcelorMittal successfully imposed higher prices and announced further positive developments for second trimester deliveries. Czech/Slovak demand is very robust. The upward price movement has begun. All flat product values are higher in Euro terms but the Czech Crown is so strong that the improvement is not evident when figures are quoted in the local currency.
In Western Europe, values have been substantially affected by the tremendous raw material cost escalations announced recently. Price demands from domestic mills have shot up in the last few weeks and the major producers are talking of even higher numbers in the near future. With third country import offers comparatively scarce, buyers have nowhere else to go. The upward trend is certainly not demand led.
STEEL INDUSTRY NEWS FROM MEPS INTERNATIONAL LTD