MEPS forecasts world steel output, this year, at 1655 million tonnes. This equates to a 3 percent increase on the outturn in 2013. The majority of this growth will, once again, come from Asia, particularly China.

We believe that steelmaking in the EU will increase, this year, following a decline in each of the past two years. Our estimate, at 170 million tonnes, represents an annual increase of 2.6 percent.

Steel manufacturing in Europe, excluding the EU and CIS, should reach 40 million tonnes in 2014 – a rise of 3.1 percent, year-on-year.

Our 2014 forecast for steelmaking in the CIS has been downgraded in this issue and now stands at 108.5 million tonnes. This represents a slight decrease from the previous year’s outturn.

North American raw steel production is predicted to be relatively unchanged this year, compared with the figure recorded in 2013.

Our prognosis for the outturn of crude steel in South America this year is 46.7 million tonnes – up 1.5 percent from the 2013 level.

Steel manufacturing in Africa is forecast to increase this year to 16.55 million tonnes. This equates to a rise of 3.1 percent, compared with 2013.

Another record steel output figure is forecast for 2014 in the Middle East. At 27.4 million tonnes, this will be the sixteenth consecutive annual rise in production.

Total Asian steel manufacturing should reach a figure of more than 1.1 billion tonnes this year. This equates to an increase of 3.7 percent, year-on-year.

Source: MEPS World Steel Outlook Quarter 1-2014


hallenging trading conditions persist in China. Price growth returned to the billet and slab segments. However, market jitters remain evident. Local steel traders have expressed concerns that the steel-consuming sectors are starting to lose momentum. The China Metallurgical Industry Planning and Research Institute has forecast that domestic steel consumption will slow to 3.0 percent this year, half the rate achieved in 2013. Local brokers report that Australian seaborne iron ore fines in week 16 (with an iron content of 62.5 percent), were traded, on average, at US$116.00 per tonne CFR – an increase of 4.0 percent compared with the March settlement figure. However, prices began to trend downwards in week 17.Semi Finished Steel Review

The business environment remains challenging in South Korea. The building sector remains subdued. Domestic billet selling figures, in national currency terms, are down 2.5 percent compared to the corresponding period last year. Billet exporters have fared no better. Buying appetite amongst Asian re-rollers remains limited. The price differential between domestic and imported billet material has widened to US$24 per tonne.

Purchasing volumes of finished steel products in Taiwan are predicted to be stable, at best, in May. Brokers are forecasting that steel production may fall ahead of the summer months, citing weak end-user demand and electricity rationing. The premium for foreign cast billet relative to domestic material has narrowed to US$15 per tonne (previously US$25 per tonne).

Source: MEPS – Semi-Finished Steel Review


Worldwide total crude stainless steel output in 2013 reached an all-time high figure of 38.13 million tonnes. This exceeds the last peak, achieved the previous year, by 7.8 percent. MEPS predicts that global production will grow by a further 3.6 percent, this year, to reach a new record of 39.5 million tonnes.Stainless Steel Review

Global outturn in 2013 was higher than previously forecast. However, production in the EU, South Korea and Taiwan was lower than in 2012. Output in the United States and Japan began to trend upwards, albeit remaining significantly below the peak, pre-crisis figures achieved in 2006.

Production in China and other developing nations continues to expand at a faster pace than in the established stainless steelmaking countries.

China’s output climbed more quickly than had been predicted, to total almost 19 million tonnes, last year. Although the rate of growth is expected to slow in 2014, the forecast outturn of 19.75 million tonnes would represent exactly half of all worldwide production.

Output in countries in the “Others” category is predicted to increase by over 6 percent, in 2014, to reach 3.825 million tonnes.

While there are signs of economic recovery in the EU, producers in this region have lost market share, globally. Output in 2013 was down by 4 percent, year-on-year, at less than 7.2 million tonnes. A moderate recovery, to 7.3 million tonnes, is anticipated this year.

Production in the United States grew by more than earlier forecasts, to just over 2 million tonnes, in 2013. However, the outturn this year is expected to remain at a similar level.

Japanese stainless steelmaking showed modest annual growth of 1.2 percent, in 2013. A stronger upturn is predicted in 2014, to achieve a total of 3.3 million tonnes – up 4 percent on the year earlier figure.

Output in South Korea is expected to turn around, with a 3 percent, year-on-year, increase this year, following a small drop in 2013.

Production in Taiwan decreased by 25,000 tonnes last year, compared with the previous twelve month period. However, the outturn in 2014 is forecast to be close to the 2012 figure.

Source: MEPS – Stainless Steel Review


International Steel ReviewThe MEPS Global All Products Composite Steel Price was US$713 per tonne in April – unchanged from the previous month. US strip mill product prices increased. In contrast, transaction values declined in the EU. Selling figures in Asia were relatively stable.

Following the successful implementation of last month’s US$30/40 per short ton rise, US flat product producers have announced a fresh round of increases of between US$25 and US$40 per short ton. Delivery lead times have extended considerably due to supply side disruptions. The lack of domestic availability is likely to keep import demand high. Severe winter conditions played a huge part in causing delivery delays and a general decline in sales during the first quarter. With spring approaching, the view is that market conditions will continue to recover.

There is still some resistance to producers’ efforts to advance prices in Canada but transaction values are starting to move up. The weak domestic currency is still deterring imports from the US. Supply is tight. Inventories continue to be low throughout the supply chain. Customers are cautiously optimistic regarding a slight uptick in consumption.

Expanding output continues to weigh heavily on the Chinese market, particularly as the pace of manufacturing growth has slowed. However, both mills’ and traders’ inventories continue to contract and a number of steelmakers will carry out maintenance this month, thus cutting output. Export volumes have surged. Producers are focussing on overseas sales but their profitability is still being squeezed due to an overall imbalance in domestic supply and demand.

Recently escalating domestic consumption in Japan is expected to decline over the next few months, following an April increase in sales tax, which is likely to deter consumer spending. For the moment, steelmakers are having to cope with higher outlay on scrap, energy and transport, with little likelihood of recouping these additional costs from customers. Moreover, imports are becoming cheaper as the firm demand in Japan attracts overseas traders. Volumes have climbed rapidly in recent months.

MEPS has noted no improvements in the South Korean situation. Selling values are flat and producers’ profits have tumbled. Demand is lacklustre amidst surplus supply which is the result of domestic overcapacity and an influx of cheap Chinese material. Output of flat products is forecast to shoot up even more during 2014. A lack of sales opportunities in an extremely competitive export environment is contributing to the overall problem.

In Taiwan, major steelmaker, CSC, has said it will keep official June list prices unchanged, following a small rise for the April/May period. This month, sales continue to be subdued as the traditional second quarter peak season demand from industrial sources appears slow to materialise. Selling values in the marketplace have eased downwards, partly as a result of ongoing import pressure from the Chinese mainland.

An imbalance in supply and demand has continued to be reflected in West European flat product prices. Despite optimistic macroeconomic indicators in several countries, customers are still hesitant to place orders. Last month’s sudden dip in raw material costs caused a negative reaction in the market. Now that the trend has reversed somewhat, we may see steel prices bottom out. Indeed, several buyers have commented that the mills have recently become quite resistant to granting further discounts.

Source: MEPS – International Steel Review


Upward price momentum was witnessed in three of the four Indian regions researched by MEPS. Selling figures, in rupee terms, last reached current levels in May 2012. However, local traders remain cautious about the strength of underlying consumption in the interim – citing reduced activity during the country’s general election and the forthcoming monsoon season.Ferrous Scrap Review

In China, quotations have fallen back marginally from the levels touched in early trading. Domestic scrap traders have begun to query whether the latest settlement figures are supported by market and economic fundamentals. The negative sentiment has been fuelled by restrained end-user demand for finished steel products.

In April, Japanese electric furnace steelmakers increased their HMS2 purchasing figures, prompted by tight domestic supply. In early trading, Tokyo Steel Manufacturing, a bellwether for the domestic steel industry, lifted its procurement prices at all five subsidiaries. The upward adjustment was executed in three phases. Exporters based in Chubu, Kansai and Kanto expect the positive price trend to continue in the short term.

Effective price settlements increased this month for the three bellwether cut grades tracked in the United States. Low mill inventory and a shortage of material created a seller’s market. As for May, brokers acknowledge that the flow of obsolete and prime industrial grades into dealers’ yards will improve, which could lead to lower quotations. Exporters, operating out of East and West Coast ports, adopted aggressive pricing positions in early-April, underpinned by the strength of the domestic market and the mistaken belief of a revival in Turkish offshore demand. However, the positive sentiment was short-lived. The availability of low-cost semi-finished steel material and the strength of the US dollar had dampened both the price and tonnages for bulk cargos and containerised scrap – particularly, shipments to Asian clients.

Taiwanese mills, operating electric furnaces, persevered with conservative scrap purchasing policies during April, due to the recent downturn in key steelmaking raw material prices and slow domestic reinforcing bar sales. As for May, import tonnage is forecast to decline due to planned production cutbacks.

Arduous business conditions perist in the South Korean steel market. In May, Korean importers are expected to persevere with a wait and see attitude. The current initiative by US suppliers to lift prices is viewed as ill-timed, counterproductive and will only escalate purchases from alternative sources.

Source: MEPS – Ferrous Scrap Review


An imbalance in supply and demand has continued to weigh heavily on European flat product prices. Despite optimistic macroeconomic indicators in several countries, customers are still hesitant to place orders. March’s sudden dip in raw material costs caused a negative reaction in the market. Now that the trend has reversed somewhat, we may see prices bottom out. Indeed, several buyers have commented that the mills have recently become quite resistant to granting further discounts.

Independent Monthly Steel Pricing in Europe
Independent Monthly Steel Pricing in Europe

Although the business climate is relatively good in Germany, steel prices have been under pressure because the market is being targeted by producers in other EU countries, where demand is more subdued.

There has been no improvement in French activity. End-user demand on the service centres is poor and resale prices are described as ‘awful’. Meanwhile, the mills have tried to resist downward price pressure as best they can.

In Italy, Ilva reduced prices for new orders due to competitive offers from China and a reduction in iron ore costs. Business activity is slow, with very few deals being concluded. Market sentiment is poor. There is a lack of demand from end-users. Consequently, service centres are reluctant to purchase new material. Buyers are postponing placing orders because they fear that the bottom has not been reached.

UK flat product service centres report that both demand and profit margins, in March, remained stable to good. However, mill basis figures began to fall when raw material costs declined but have steadied now. Nevertheless, buyers are sceptical that the, recently announced, June hike can be secured, due to oversupply.

In Belgium, the positive economic indicators are not reflected in distributors’ sales. There are many imports from Southern Europe that, even with relatively high transport costs, are very competitively priced. This has created negative pressure in the marketplace. Even though the mills are proposing an increase for June, buyers do not appear to be prepared to pay more.

Sentiment is starting to recover a little in Spain due to better economic forecasts for 2014. However, the steel market remains quiet and prices have continued to slump. Very little business was actually placed at the lower prices because, in late March, buyers believed further discounts were possible. Opinion has now changed because the mills have become reluctant to make commitments at those levels.

Source: MEPS – European Steel Review