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ASIAN AVERAGE CARBON STEEL PRICES – LATEST FORECASTS FROM MEPS

Posted by: Mu Ju 2019-11-23 Comments Off on ASIAN AVERAGE CARBON STEEL PRICES – LATEST FORECASTS FROM MEPS

In the flat products category, our July forecasts are little changed from the previous month. Transaction values are expected to continue climbing from September onwards. An increase in the price of oil products, electricity and railway freight costs in China are likely to put upward pressure on selling figures throughout the second half of this year. Asian mills are also likely to push through further advances in a bid to recover the higher cost of iron ore since the conclusion of the 2008 annual contracts. Posco is due to begin work on the Gwangyang mini mill in October. Consequently, there will be reduced export quantities from South Korea during the fourth quarter. This could help to restrict supply across the region. As such, steel selling figures are forecast to rise faster over this period.

Transaction price growth is likely to persist into the New Calendar Year. However, smaller increases are envisaged as more moderate rises in raw material costs are predicted for 2009. Demand is expected to remain strong. Consumption in China should climb further, particularly in the earthquake hit regions as reconstruction continues.

Transaction values in the long products sector are likely to rise in the final quarter of this year as markets recover from the seasonal lull. We envisage escalating energy and freight costs pushing steel prices higher. However, a softening in scrap values is possible in the short term. This should limit the size of the increases in transaction figures. Export opportunities are expected to remain strong. Low levels of inventories are unlikely to be sufficient to feed any upturn in demand in the next trimester. Consequently, supply shortages could fuel the upward price movement.

Increased construction activity in China, as a result of the recent earthquake, is likely to keep consumption high in the medium term. Output cuts by some mills in the region are expected to restrict supply in the market. This is predicted to help push transaction values higher next year. As such, Asian average prices are forecast to move closer to other international levels by the beginning of 2009.

Source: MEPS – STEEL PRICES ON-LINE (regional steel price tables & forecasts

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