Tag Archives: MEPS

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

Uncertainty Dampens Trading Activity in Emerging Steel Markets

Difficult trading conditions persist in Brazil. Buyers started to push for lower prices, in view of the downward movement being witnessed in other global steel markets.

Russian steelmakers are under pressure to lower plant utilisation rates to support transaction values. Market fundamentals remain weak. Local trading houses are booking for only immediate requirements due to price fluctuations and working capital problems. Shipments to tube fabricators, OEMs and mechanical engineering companies continue to underperform expectations.

Business sentiment deteriorated in India. Stockists operating in states, adjacent to the Bay of Bengal, witnessed a fall in business activity with the onset of the monsoon season. Meanwhile, steel manufacturers hoped that steady pricing, in July, will persuade customers to place orders rather than postponing purchasing decisions.

The Ukrainian market is slow ahead of the summer vacations. Order intake at the mills is very subdued, with few deals being concluded. Transaction figures fell as producers became eager to book business.

Procurement activity in Turkey is forecast to pick up after the holiday period. However, cautious service centres are booking for only immediate requirements, in anticipation that the revival will be short-lived. The third quarter is usually a slow season for the local steel industry

The United Arab Emirates market is very quiet, with no business activity of any significance taking place during the holy month of Ramadan. Domestic producers continually speak of higher prices but they are flexible when there is business to place.

Source: MEPS – Developing Markets Steel Review – June 2017 Edition

US Coil Prices Soften, Plate Values Steady

US strip mill product prices fell, in the past four weeks, according to MEPS. Hot rolled coil is readily available, from both local and offshore suppliers. Domestic delivery lead times are between two and four weeks. A number of US steel buyers remark that local producers and several Canadian steelmakers continue to offer material at slightly reduced price levels, in an attempt to secure orders.

Cold rolled coil buyers were successful in securing discounted deals from domestic mills – after achieving price reductions on hot band material. Many US producers lowered prices, in an attempt to secure orders, amid stronger foreign competition. Small pockets of material from Russia, Egypt, Canada, Mexico, South Africa, Malaysia and Thailand are available in the domestic market.

Demand from the automotive sector has slowed down, albeit from record levels. Local hot dipped galvanised producers are willing to offer reduced prices, in an attempt to secure orders. Delivery lead times are between five and seven weeks. A shortage of competitively-priced offshore options persists.

The upward trajectory of US hot rolled plate prices stalled, as local values were unchanged, this month. However, the domestic mills could announce a list price hike, in the near term. Healthy demand from the construction and energy sectors and tight supply conditions could assist mill attempts to solidify previous price gains. Domestic delivery lead times are projected to extend, in the third trimester, as several US plate producers plan maintenance outages. Availability of offshore hot rolled plate remains limited as a result of trade cases.

Source: MEPS International Steel Review – May 2017 Edition

THE MEPS EU ALL PRODUCTS COMPOSITE STEEL PRICE DECLINES BY 3 PERCENT IN MAY

The negative price sentiment, noted last month, for sales of hot and cold rolled coil, was more pronounced, in May, in both the north and south of Europe. The upward trend for hot dipped galvanised coil values has stalled and weakness is evident in a number of countries. Spot business slowed amidst a reluctance to commit to forward transactions. Stocks in the supply chain are high. Quantities of material, ordered at the end of 2016/early 2017, in advance of price hikes, are now arriving at the ports or at customers’ warehouses. Moreover, recent limitations on domestic supply eased, as European mills caught up with order backlogs. Producers in third countries that are currently unaffected by EC antidumping measures, are making competitive offers to European customers. The recent strengthening of the euro against the US dollar also made overseas offers more attractive.

Underlying steel consumption is robust, in Germany, due to the healthy economic situation. However, recent supply tightness has eased considerably, especially for hot and cold rolled coil. Standard grades and sizes are on offer, at attractive prices, from sources such as India, Taiwan, Vietnam, South Korea and Russia. Service centre stocks are bloated. The upward price momentum reversed, in May.

A general downward adjustment was noted, in France. End-user activity, which fell in April, compared with March, was only moderate. May demand is expected to be slow, with several national holidays and the uncertainty brought about by the election. Decoilers are carrying relatively large inventories.

In general, Italian demand is stagnant and the market is fragile. The only sectors performing well are auto and mechanical engineering. As service centre stocks are high, buyers are in no hurry to re-order. Their sales are sluggish, as end-users await price developments. Resale values have fallen, resulting in poor profit margins. Ex-works strip mill product figures are under pressure due to the availability of competitively priced Indian, Turkish, Egyptian and Malaysian offers.

The UK manufacturing industry continues to perform strongly. Distributors report that end-users are busy. However, third trimester business was transacted at reduced prices. Third country import offers, from a variety of sources, are significantly cheaper than their domestic counterparts. Deals have been concluded for September arrival. In addition, inventory levels throughout the supply chain remain high, including material ordered from mainland European suppliers that is building up at the docks. Service centre sales are still healthy but profit margins are under pressure.

Domestic basis figures have reached their peak in Belgium, with negative movements monitored for third quarter deliveries. Distributors’ inventories are abundant, allowing them to postpone purchases. Import possibilities are available at competitive prices but customers show little interest. We detect considerable caution as many market participants believe that further decreases are likely.

Spanish basis values are falling quite sharply, despite satisfactory levels of consumption from a growing manufacturing sector. The perception of a negative price trend led to a lack of order intake at the mills, as buyers delayed purchasing decisions. End-users are pressing distributors for price cuts. Import offers are plentiful, for September arrival, but few deals have been concluded as customers are in “wait and see” mode.

Source: MEPS – European Steel Review – May 2017 Issue

GLOBAL STAINLESS STEEL OUTPUT TO EXPAND IN 2017 TO NEW RECORD HIGH – MEPS

Worldwide crude stainless steel production, in 2016, reached an all-time high total of nearly 45.8 million tonnes. This represents an increase of more than 10 percent, compared with the year earlier figure. MEPS predicts that global output will grow by around 3.75 percent, in 2017, to achieve a new record high mark of around 47.5 million tonnes.

Outturn in all of the long-established stainless steelmaking countries increased, year-on-year, in 2016, after most had recorded a contraction in the previous twelve months. Production continued to grow, strongly, in China and in the developing nations.

Despite earlier expectations that stainless steel output growth, in China, would slow down, rapid expansion continued, in 2016. The country’s official annual total was reported at nearly 25 million tonnes – an increase of more than 15 percent, compared with the previous year. This equates to almost 55 percent of the world aggregate figure. With antidumping measures, in many countries, restricting global exports, China has recently made moves to curb its rate of expansion.

After a slight dip, in 2015, production in the United States returned to its trend of robust growth, increasing by more than 6 percent, last year, to total around 2.5 million tonnes. MEPS predicts that output will expand by a further 2 percent, in 2017.

Crude stainless steel production recovered strongly, in Taiwan, in 2016 – increasing by almost 14 percent, year-on-year, to exceed 1.25 million tonnes, for the first time since 2010. More moderate growth is forecast for this year.

Annual outturn advanced by between one and two percent, in the EU, Japan and South Korea, last year. Further, steady expansion, of a similar magnitude, is foreseen, in these markets, in 2017.

Source: MEPS – Stainless Steel Review – April Issue

MEPS EXPECTS STEEL PRICE SURGE TO CONTINUE

According to MEPS research, International flat steel product selling figures have been on an upward trend throughout 2016. Substantial hikes are anticipated when negotiations between mills and customers are concluded, in December. Further strong gains are likely in the first quarter of 2017. Spot coking coal prices have more than tripled to top US$300 per tonne in recent months, while iron ore values are fluctuating in the US$70-80 per tonne range. Due to the large rises in raw material expenditure, steelmakers are making concerted efforts to lift their selling figures. With competitively-priced imports unavailable in many Western nations, buyers are liked to accept the higher prices tabled by their local steel producers in order to secure sufficient material.

Source: MEPS International Steel Review – November 2016 Issue