UNITED KINGDOM February 01 2017 9:25 PM

LONDON (Scrap Register): The global average flat products price increased by 4 percent during January this year, compared with December last year, said the MEPS International.

At $691 per ton, it stands more than 50 percent above the figure recorded in January 2016. Further modest rises are envisaged during the first quarter as mill delivery lead times extend in many countries and trade barriers restrict import volumes. 

However, MEPS predicts that steel selling values are approaching their peak, following the strong gains witnessed, in the past twelve months. 

A key driver for recent steel price increases was an upturn in raw material costs. However, spot coking coal values have fallen by more than $100 per ton since early December. 

This will likely result in a significant reduction in second quarter coking coal contract prices. Furthermore, iron ore values are also expected to decline during this period. 

Consequently, with vastly deflated raw material costs, steel prices are forecast to come under downward pressure, in the April/June trimester. However, MEPS predicts that steelmakers, operating blast furnaces, will be able to lift their margins, as reductions in input expenditure are expected to outweigh the decline in steel prices.

Source: MEPS