UNITED KINGDOM June 12 2014 12:15 PM

LONDON (Scrap Register): The MEPS – All Products Composite EU Carbon Steel Price has fallen to a 51 month low in June this year. Further small reductions are possible in the coming months. However, an upturn in steel selling values will be highlighted in the June issue of the company’s monthly report, European Steel Review and the On-Line Steel Price Forecasting Service.

According to MEPS, the market is likely to continue to be plagued by low priced offers from steel producing countries in Asia and CIS, in the short term. Negative price pressure, from customers wishing to share in the mills’ declining steelmaking raw material costs, could also play its part. In contrast, inventories across the supply chain are modest. End users have been restricting their steel purchases, of late, to just those for immediate requirements. Buyers are holding out for possible lower offers in the coming weeks/months. For similar reasons, service centres have not been making speculative purchases.

MEPS expects mill activity to decrease over the summer months as the producers engage in plant maintenance. Supply of finished steel products is likely to weaken. The combination of reduced steel supply and lower inventories is expected to lead to some shortages after the holiday period. Customers will, almost certainly, start to place orders for new material as demand picks up. With fewer inventories through the steel supply chain, the mills should be able to obtain steel price increases in the latter part of the summer.