Tag Archives: forecasts

MEPS Forecasts Global Crude Steel Output at 1.7 Billion Tonnes This Year

World crude steel production is expected to expand, markedly, in 2017. Steel demand has rebounded, this year, amid an improving economic climate. A revival in investment is underway in many countries. Moreover, we note a continued firm level of consumption.

MEPS has upgraded its prediction for steel output in China and the rest of the world. Global production is forecast to surpass 1.7 billion tonnes in 2017 – up by 5 percent, year-on-year. Outside China, the largest gains, are expected to be attributed to increased output in Iran, India and Turkey. These three countries have all recorded strong export sales, this year.

A healthy performance is noted in the developed economies, with a recovery in steel supply and demand, in the EU and United States. Steelmakers worldwide, particularly scrap-based producers, have been able to raise output due to a reduction in the volume of Chinese finished and semi-finished steel exports.

The outlook for steel production and consumption, in 2018, is broadly positive. However, MEPS predicts that the current growth levels are unsustainable in the long term. The recent upturn is largely cyclical and recovering from the lows witnessed in late 2015/early 2016. Steel demand growth is expected to weaken and the problems of structural overcapacity remain, largely, unresolved. Low capacity utilisation levels, in many countries, are likely to constrain mill profitability.

Source: MEPS – World Steel Outlook to 2020

MEPS EU Average Flat Product Prices Slip But Long Product Values Recover

Flat product prices continued to fall in the latter part of June, in both the north and south of Europe. Basis numbers were driven down by the impact of inventory build-up and price pressure from third country imports. Market sentiment began to change in early July, as competition from overseas material reduced. Foreign offer prices increased and the expectation of the introduction of antidumping duties, on hot rolled and hot dipped galvanised coil, during the summer, also led to fewer import transactions. An extended period of destocking is coming to an end. End-user consumption is at a high level and service centres are beginning to re-order for the autumn.

Reacting to this change in market direction, a number of Western European steelmakers are now pushing for price increases of around €20/30 per tonne on all strip mill products, for September deliveries.

European long product producers began to target price hikes of €15/30 per tonne, at the start of July, citing higher input costs. So far, the response from buyers is fair. At least a part of the increase is likely to be achieved. The mills are bullish and, in some instances, they are already pushing for further increases.

Source: MEPS – European Steel Review – July 2017 Issue

EU FLAT PRODUCT STEEL PRICE ROUNDUP FROM MEPS

German basis values rose, in August/September, due to limitations on the amount of material available from both European and overseas producers. According to the latest edition of MEPS European Steel Review, supply remains restricted, especially for coated products, with delivery lead times out to the year-end and beyond. Service centre stocks are reducing quickly as a number of end-users, who would normally place direct business with the mill, are buying from distributors in order to access steel more quickly.

Italian service centres report supply tightness. However, their margins continue to be squeezed. For the moment, customers are reluctant to pay more. The distribution sector has too much capacity and a number of stockists are still selling quite aggressively.

In the UK, the majority of strip mill product prices advanced, this month, as continental European producers lifted basis values to offset the weaker pound sterling. Suppliers are now talking of an additional rise. Most distributors are applying the mill increases, so margins are acceptable. Stocks are low due to supply shortfalls. We detect little availability from traders.

Belgian buyers stated that the push for higher prices does not reflect any similar growth in demand, although service centre sales are reasonably good. Mill order books, for most strip mill products, are full to December, or even beyond. Quantities are very limited and there are delays on already long delivery lead times. Distributors report that the higher mill prices cannot be applied to resale values in all cases.

A perceived lack of availability led to higher basis numbers in Spain. Service centres are concerned that their customers will only partially accept the mill rise. Some buyers anticipate that the supply issues may be resolved by the first quarter 2017. Not least, because competitively-priced imports are on offer from a number of third country sources, not affected by antidumping measures.

Source: MEPS – European Steel Review – September 2016 Issue

CZECH STEEL PRICE ROUNDUP FROM MEPS INTERNATIONAL LTD

According to MEPS, Czech hot rolled coil prices continued to advance in June. However, demand is reportedly flat as market participants are only buying what they need at the higher price levels. A number of local producers announced plant stoppages which could tighten the availability of material over the coming months.

Commodity plate selling figures increased last month. Demand remained steady yet unspectacular. Discounted deals were reportedly on offer for high volume bookings as delivery lead times continued to be short.

Cold rolled coil transaction values advanced sharply for the second successive month, in June. Imports are reportedly at a low level as Russian material, transported via the Baltic nations, is no longer present.

Hot dipped galvanised coil prices continued to soar. Demand from the automotive sector is strong as car makers announced a new quarterly sales record.

Demand for wire rod was reportedly solid. However, MEPS expects selling values to come under negative pressure, during the coming months, if scrap costs continue to fall.

Czech structural section prices increased significantly in June. Western European producers, selling into the country, have largely been successful in achieving price advances.

Source: MEPS International Steel Review – June 2016 Issue

EUROPEAN STEEL PRICES ADVANCE IN MARCH

European flat product transaction values rebounded, in March, as import pressure from non-EU suppliers declined.

In March’s issue of the European Steel Review, MEPS reports that European selling values increased, from relatively low levels, this month, after falling for much of last year.

Western European steelmakers announced their second price hike, since the start of the year. Buyers appear to be placing orders at the higher price level due to a lack of attractive import offers.

Quotations from Chinese mills rose significantly, this month. The introduction of preliminary antidumping duties on cold rolled coil from China and Russia also hampered import penetration from overseas suppliers.

In Germany, customers reported that order intake had improved. French service centres noted that flat product market activity remained firm, in March.

Positive price movements have been recorded in Italy. UK selling figures were boosted by improved distribution activity.

In Belgium, domestic figures are higher than those in February. Tighter supply availability lifted Spanish transaction values, this month.

Source: MEPS – European Steel Review – March 2016 Issue

IMPORTS DRIVE EU STEEL PRICES DOWNWARDS IN SEPTEMBER

Despite strengthening demand in a number of west European countries, flat product domestic selling values are being negatively influenced by the availability of very low-priced third country import offers. Cheaper raw material and energy costs are contributing to the situation. Market sources are quite pessimistic about the coming months. As a result, buyers expect further price reductions.

In Germany, the auto sector continues to perform well but has slowed a little, as a result of a fall in sales to China, brought about by currency exchange rate changes. The construction industry is also slowing as the winter season approaches. Service centre stocks are quite full after the holidays. However, end-users are only taking what they need for immediate use, as they anticipate even lower prices in the future. Consequently, resale values are under pressure.

The French market was muted at the beginning of September. Activity was expected to pick up, slightly, towards the end of the month, due to restocking. Market participants foresee their order books at similar levels to those in previous months. They believe that the difficult situation in China and other regions represent a threat. Producers have tried to resist negative price pressure with mixed results.

The Italian steel market has deteriorated over the summer, leading to feelings of insecurity amongst buyers and sellers alike, despite signs of some small recovery in the general economic situation. Cheap imported material is the major disruptive factor. On the demand side, the auto sector is performing well, thanks to investment in new models. The mechanical engineering segment saw some improvements at the start of the summer. Service centres report that their sales volumes are positive, compared with earlier in the year, but resale prices are poor. Competition in that sector is severe.

In the UK, distributors report that demand has remained good but that their buying prices have fallen, for the fourth quarter. Resale values have moved down, slowly and steadily, in tandem with mill figures. Service centre inventories are low relative to demand. Traders’ stocks at the docks are also depleted as caution prevails.

Prices remain on a slow, downward trend in Belgium. Turkish and Chinese imports are available. Even if customers do not purchase this cheap material, because of the long delivery lead time involved, they use the low figures in negotiations with their European suppliers in order to obtain discounts. Companies do not need to build stocks as steel can be acquired very quickly.

A massive increase in the availability of cheap third country imports occurred in the Spanish market during the summer. This has led to a series of domestic basis price reductions for November rollings of all flat products. As there is still a large differential between local and foreign figures, buyers expect further discounting for December. Underlying demand is reasonable. There has been a sharp impact on distributors’ resale values since July. Margins have been squeezed.

Source: MEPS – European Steel Review – September 2015 Issue