Posted on 12 November 2007

 

Source: Steelguru- 08 Nov 2007

UK based MEPS said that "We maintain our belief that average world flat products prices will rise steadily over the next three months. Continued strengthening of the North American values as inventory building develops should offset any weaknesses in the EU and Asian selling figures." MEPS added that "Increasing raw material costs are expected to force mills in all regions to push through price advances in the first and second quarters of next year. The Summer of 2008 is, however, forecast to be the peak of the price cycle for all flat products."
 

MEPS Said that "During the second half of next year overcapacity in the Chinese market is likely to temper transaction price gains in that area, resulting in a widening of the gap between average Eastern and Western values. This will almost certainly result in exports from China increasing once again. We envisage global competition intensifying in a climate of oversupply leading to a decline in the MEPS World Average flat products price up to the end of the forecast period."
 

MEPS added that "A slight reduction in the MEPS World average long products price is expected over the next two months. This is due to seasonally lower demand in Europe and North America canceling out gains in Asia. The residential construction sector in the US continues to weaken which is holding back increases in selling figures from local mills. Scrap values in all regions are unlikely to rise before early 2008. The Asian market should remain strong well into the first quarter of next year."
 

MEPS further added that "The first half of 2008 is forecast to be a period of significant gains in transaction figures. The anticipated hike in iron ore costs early next year should lead to a tightening of scrap availability and, as such, higher scrap prices. Rebar and Wire rod values are predicted to register the largest rises as demand from the construction sector in Europe and North America improves. A new high for the MEPS World average long products price is expected in the middle of next year before selling numbers cool over the summer months due to seasonal factors and growing oversupply in the world market."

 

 

 

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