Thursday, November 26, 2009

MEPS steel price roundup

MEPS reported a generally weak market in November with the exception of China.

“Raw steel output continues to climb steadily in the US. Mill utilisation rates were up to almost 65 percent in the first week of November. However, the recent relighting of blast furnaces has not coincided with a similar upturn in consumption. Oversupply could become a problem in the first quarter 2010. Service centres report that their sales have slowed markedly due to a lack of end-user demand, a situation they expect to continue for the remainder of this year. Consequently, their restocking phase has come to an abrupt end. As we anticipated in October, the steelmakers have started to offer discounts in order to solicit business, despite a lack of any real import competition.

The West European producers are currently facing low order intake as the flurry of activity in early September has tailed off now that distributors have restocked to appropriate levels. In many countries, prices have been lowered a little to encourage purchasing. Negotiations will start soon for first quarter 2010 business but no official announcements have been made yet, regarding the mills' proposals. The threat of excess supply is still causing unease as the steelmakers expand production while demand from the key consuming sectors stays weak. As far as imports are concerned, more expensive Chinese offers are dampening interest from potential customers.”

Read the full Report here

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