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Global Steel price slips as iron ore costs slide
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Scrap Register
AddTime：2014-7-3 16:41:46 Hits：1096
NEW YORK (Scrap Register): US flat product transaction values are steady at the level reported in May. Domestic capacity utilisation is spiking after the recent outages, although some scheduled maintenance is due soon at US Steel and ArcelorMittal. Underlying consumption is growing. Service centres are keeping stocks lean. There is no speculative purchasing. Consequently, any significant upturn in demand could cause positive price pressure. A combination of the unfavourable exchange rate and sluggish demand is keeping Canadian transaction values in check but the softening that many buyers expected has not yet occurred. Supply and demand are largely in balance. Some imported steel has started to arrive, with more scheduled for July. However, a great deal is for contractual business, not for general resale, so inventories at the service centres remain low and prices reasonably firm. So far, recent good economic news, in the form of a stronger PMI, has not generated any greater market activity in China. Domestic prices continued to head downwards, following the June 2 Dragon Boat Festival. They are being driven by excessive production capacity and falling raw material costs.
Output hit a record high in May. Steel demand is, traditionally, weaker over the summer months as construction activity slows.
The move by Japan’s government to raise the consumption tax has negatively affected buying interest. Steel demand in April plummeted by 12 percent, month-on-month, and inventories grew. South Korean demand remains at a low ebb, although, according to local statistics, the main steel consuming sectors of auto, shipbuilding and construction performed better than expected, in the first quarter. However, recent economic forecasts predict that, in the second half of 2014, growth may be slower than previously envisaged.
Taiwan’s major producer, CSC, will cut official domestic list prices for the July/August period by an average of 1.64 percent, compared with June. This will be the first time since February that the company has reduced selling values. Falling raw material costs and sluggish regional demand were the reasons cited for the move.
In Poland, steelmakers want to lift prices in July by around �5 per tonne. Buyers are sceptical because activity is no better and is unlikely to improve before the summer vacation. Demand usually falls ahead of the holiday season. The Czech economy is slowly recovering, as is consumer confidence.
Activity in the West European flat products sector is unseasonably quiet. Although underlying demand is gradually improving in several countries, it remains a buyers’ market. Mills have reported heavier order intake lately, as consumption strengthens but supply is still in surplus and delivery lead times quite short. |