Steel prices have continued to drift downward since the summer peak of 2006. European steel prices felt the impact somewhat later, but have nevertheless come under pressure of rising inventory levels and overcapacities. Higher quantities of Chinese steel on the world market especially lowered prices in the U.S. Meanwhile, steelmakers in
China and
India are screening the supply market to secure
iron ore and other raw material procurement as input prices are expected to rise further.
In the latest edition of Consline Steel Trends, we continue to analyze current market developments and give a forecast on prices until the third quarter of 2007.
Especially scrap and iron ore prices are expected to rise further, though not as dramatically as before
•
Scrap prices will most probably see a further growth, albeit at a decelerated pace
•
Scrap exports from
CIS countries will likely to decline further after significant drops in 2006; export prices from these countries have thus increased
•
Scrap prices in Asia-Pacific are also showing a clear upward trend
•
Iron ore prices will continue to grow, albeit at a lower pace
•
China's
Baosteel has settled the benchmark price rise for
iron ore, competing against the leveraged bargaining power of POSCO and Nippon Steel, at 9.5 percent for the year to March 2008
• Most input costs (energy, raw materials, labor, etc) are forecast to rise in the mid-term
Chinese exports put pressure on prices even if the market is moving to more stability
•
China's steel exports rocketed by almost 110 percent to 43 million tons in 2006 as imports dropped by 28.3 percent to 18.6 million tons, leading to antidumping considerations in the mainly affected regions, the US and
Europe
•
China recorded a double-digit decline in steel exports from December to January and the decline is likely to continue throughout 2007
•
China's exports of finished and semi-finished steel are expected to fall by 20 percent this year, according to commodity analyst Platts, in the light of robust Chinese demand and
China's attempt to curb exports
• Japanese steelmakers fear that their customers outside
Japan will switch to Chinese suppliers; higher export volumes of Chinese steel into the US could force Washington to restrict imports, sending Chinese steel back into Asia
• Russian steel exports to
China plunged 79 percent in 2006, with steelmakers diverting supplies to particularly
North America and the
Middle East
China is showing first signs for market and growth consolidation
•
China will further strengthen its influence in the global steel industry as it tries to consolidate supply sources as well as entering co-operation agreements and screening takeover opportunities
•
China aims at removing 35 million tons in outdated crude steel capacities in 2007
•
China may reduce or even rescind steel export tax rebates in March
•
China will strengthen its position as negotiator with
iron ore companies and set input prices for the whole sector
Please
click here to reach the details of the extract and the full report of Consline Research & Consulting
www.consline.com