US, Canada, China Composite Steel prices decline in February: MEPS

UNITED STATES February 28 2014 6:34 PM

NEW YORK (Scrap Register): A growing number of import offers, plus a weather-related reduction in general demand, have combined to produce negative price pressure in the US flat products market. Inventories throughout the supply chain have increased as less business has been concluded due to climate issues but, in the future, real consumption is likely to be relatively unchanged.

In Canada, service centres report that business levels were a little better in January and at the start of February. Domestic mill delivery lead times are currently at six to eight weeks. The Canadian dollar has weakened against the US currency, making imports from the US more expensive. Local steel prices have increased proportionately.

The Chinese market has been subdued following the long New Year celebrations. The weather has not been favourable for construction and general sentiment has been poor. Despite already high inventories, the mills have continued to boost output in early February. Traders have continued to discount in order to generate cash flow.

The Japanese economy continues to improve. Steel demand from the manufacturing sector is robust. Some steelmakers are still pushing for price rises but Tokyo Steel has left its March list unchanged for the second consecutive month. Sales revenue from exports continues its upward momentum, despite a strengthening of the yen in January.

MEPS has noted a degree of price stability in Western Europe during February. Steelmakers continue to push for higher prices, in order to boost their low profit margins. However, the announcements and the reality are somewhat different. Buyers believe the target figures are unrealistic, given the present state of end-user demand. Consequently, they continue to try to resist the mills’ aspirations. Prices for some quarterly contracts have already been rolled over from period one to the second trimester.