MODEST RECOVERY IN MEPS GLOBAL STEEL PRICES IN SEPTEMBER
US activity levels are relatively quiet, as is the norm at
this time of year. However, market sentiment has deteriorated. Rising import
volumes and domestic capacity coming back on stream could lead to oversupply.
Consequently, downward price pressure could ensue. Certainly, the recent upward
trend has ceased and some small decreases have been noted.
Order intake at the Canadian mills has softened but, for now, producers are
holding the line on prices. Customers expect discounting to commence quite soon.
Inventory levels are fairly low, with service centres only purchasing what they
can move. Distributors report that demand is still uncertain but that their
resale margins have improved slightly. Buyers are not particularly interested in
imports because of the long delivery lead times and large tonnages required.
In China, an upward price tendency was apparent throughout August and into early
September. Since then, some softness has developed and sentiment has weakened,
despite the fact that downstream industry is recovering. Steel output began to
increase in late August, leading to climbing inventory levels.
The Japanese economy is in recovery. Orders from the manufacturing sector are
expanding and steel stock levels are coming down. Steelmakers have started to
push for higher prices to cover their escalating costs of production. Overseas
business picked up again in August, despite poor economic circumstances in
Europe, a lack of demand from key customers in the Asian region and overcapacity
The South Korean domestic steel market continues to be lacklustre, with no
improvement foreseen during the remainder of this year. Export business is still
slack. Moreover, the depreciation of the Japanese yen has hurt Korean exporters.
The local steelmakers have been unable to hold on to some flat product prices
during recent settlements.
Strip mill product selling values have moved up in Taiwan during the summer. The
country’s largest producer, CSC, has decided to lift most of its official
domestic list prices for October/November deliveries as raw material costs
surge. Manufacturing production and exports of finished goods are steadily
reviving. The fourth quarter is, traditionally, the peak season for steel
consumption. In addition, several mills will carry out maintenance, thus
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