Global Steel Prices Expected to
The downward trend in global steel prices continued, in
February. North American and European flat product steelmakers failed in their
attempts to secure any of their tabled increases. The consensus view, from MEPS’
February research, is that the bottom may soon be reached, in both regions.
Sentiment is, generally, turning positive – with the market showing potential to
stabilise, or rise slightly, in the coming months.
World steel manufacturers are likely to be supported in their efforts to lift
values, by the improving market fundamentals. Rising raw material expenditure
and the expectation of improved activity, during the traditionally stronger
second trimester, will assist the mills’ cause for higher prices.
With the exception of material in North America, scrap expenditure has started
to increase, worldwide. At the same time, iron ore costs rose, due to
supply-side fears - resulting from the recent dam collapse in Brazil. Market
participants are hopeful that demand from the European and North American
automotive sector will pick up, in the coming months. Moreover, construction
activity will be boosted, by seasonal factors. In addition, the continued impact
of the Section 232 trade legislation and the recently introduced EU safeguard
measures will offer US and European steel manufacturers a degree of protection
from increased import volumes.
Improved demand, in Asia, due to restocking activity following the Lunar New
Year, is expected to lead to a modest pricing uptick across the region, in the
coming months. However, the medium-term demand prospects are, generally, less
clear – with Asian economies, in particular, China, expected to slow down, in
Heightened trade tensions, notably, between the US and China, plus the UK’s exit
from the European Union, are causing a great deal of uncertainty among global
steel buyers. MEPS forecasts that any reversal of pricing fortunes, in Europe
and North America, is likely to be modest and short-lived.
MEPS - International
Steel Review - February 2019 Edition
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