MEPS GLOBAL STEEL PRICE DOWN 3.4 PERCENT IN OCTOBER
US flat product transaction values
continued to slip in October as many mills offered discounts to gain orders.
Buyers were postponing the conclusion of deals in the hope of cheaper prices in
the future. However, on October 28, AK Steel announced its intention to lift
values by US$20 per short ton, with immediate effect. Demand has softened a
little, partly for seasonal reasons. At the same time, availability has
expanded, both from domestic and overseas sources. High prices in the US,
relative to the rest of the world, have attracted a great deal of interest from
steelmakers in other regions. Moreover, raw material costs are declining.
Service centre inventories are also growing as their business slows.
In Canada, we have noted downward price movements on uncoated strip mill
products. Buyers are expecting producers to be even more flexible when
negotiations open for December deliveries. There is little optimism in the
marketplace, with customers only purchasing for their immediate needs.
Inventories appear to be steady, with no stock building.
Chinese steel consumption is contracting due to slower economic growth. This has
put even more negative pressure on raw material costs and on the price of steel.
Meanwhile, inventories continue to grow, both at the mills and in the
marketplace. Traders are attempting to reduce their stocks. Consequently,
steelmakers’ orders are reducing. Major producer, Baosteel, has announced that
it will cut official ex-works domestic prices for strip mill products for
deliveries in November. Overseas sales volumes hit record highs in September.
Japanese steel consumption continues to improve but much of the increased
business is being picked up by importers. Indeed, in August, domestic mill
orders were down by 3 percent, year-on-year, as export volumes also fell away.
Flat product values were unchanged in October. However, Tokyo Steel has cut all
official list prices for November delivery by ¥3000 per tonne to try to
counteract cheap imports from China, despite higher energy costs. The company’s
outlay on scrap has reduced considerably over the last few weeks.
South Korean producers are trying to cope with slowing economic growth and
significant import pressure. In September, supplies of steel products from Japan
increased for the first time in six months as the weak yen helped to push down
prices. Chinese steelmakers are also gaining market share. The outlook remains
pessimistic, with stagnant demand and oversupply, leading to further discounting
this month. Producers are increasingly looking for export opportunities.
In Taiwan, local consumption is slowly recovering. However, major integrated
producer, CSC, has announced that it will cut domestic list prices by an average
of NT$646 per tonne (just over 3 percent) for December contracts, after three
months of no change. Although this is a period when, traditionally, steel demand
is at a peak, there is a great deal of competition from cheap imports,
particularly of Chinese origin.
Steel Review - October Issue
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