Wednesday, August 12, 2009

MEPS – World steel prices.

As predicted, the MEPS- Global Carbon Steel price moved up by over 1 percent in July. Higher input costs forced local producers to implement advances in domestic selling figures, with varying success across the three regions and products researched. Strip mill categories recorded the largest gains. Inventory adjustment is almost complete, with some shortages developing. Consequently, many distributors increased their purchases with local mills. Delivery lead-times lengthened. Output restrictions were eased by some steelmakers. Sales to the automotive and bridge building sectors recovered slightly. However, end-user demand was lacklustre, particularly from the construction sector in most countries. Many customers are still working at reduced operating levels and taking extended summer holidays. Export opportunities from east to west remained low due to weak global consumption. Banks remained reluctant to lend to businesses, negatively affecting buying power.

Rising input costs are likely to force mills to push through additional increases in transaction values during the remainder of 2009. Distributors may buy ahead of further perceived price hikes as they attempt to refill depleted inventories. However, the summer slowdown in the west could restrict these advances initially. World steel consumption is forecast to remain subdued this year. Most customers in the EU and US will also keep their re-stocking efforts to a minimum in the run up to the financial year end. Consequently, the recovery in steel selling figures is expected to be restrained during the fourth quarter.

Many western consumers are likely to increase their purchasers of steel related products by early 2010. Moreover, credit restrictions should reduce, stimulating demand across the supply chain in all regions. Further advances are, therefore, forecast for the first half of 2010 as the world economy emerges from the recession. However, this upturn is predicted to be much slower than the ones recorded in recent times because many companies will still be feeling the after effects from the recession.

Source: MEPS International Ltd


We have seen steel shortages developing here in the UK, particularly with regard to Galvanized. this is partly being put down to problems at Corus.

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