Higher prices, fewer products in Asia

The increase in global demand pushed up steel prices and let to a decline in the availability of products –especially of HR products- in the entire world. The prices of hot and cold rolled products have increased in the entire Asia market. In winter, most EAFs in the Asian region had considered delaying their production as much as possible due to the high price of scrap facing lower steel prices. Blast furnaces were also disturbed about the low price levels due to long winter and they generally spent February for overhaul works. Therefore their inventories and productions fell short of the demand in spring. CIS exports to Asia decreased. The domestic demand in CIS countries shot up with the spring. CIS domestic and export prices have increased and the export volume of CIS mills decreased significantly. The monthly increase in export prices reached 20 percent. Chinese mills also kept increasing their ex-factory prices rapidly. Even after the price hikes, the export order books of Chinese mills are either full or the companies abstain from accepting new orders. Most Chinese mills have either failed to meet their production tasks for exports recently, or they expect prices to increase further. The decreasing supply from Chinese and CIS mills led to an increase in Japan's exports to Asia; mainly to South Korea. On the other hand, S. Korean steelmakers, who mainly produce for the domestic automobile and heavy industries market, are not quite happy with the current situation as the traders and steel consumers in S. Korea piled up inventories when Chinese export prices were low. Meanwhile, construction sites resumed operation thanks to the better weather in Asia. However, rebar inventories are high, which prevents a large scale increase in rebar prices. Nevertheless, it is heard that the transaction situation in Japan and S. Korea is good with stable upward prices. The increase in the demand from the US, Middle East and European markets also support exports from Asia. Chinese pipe exports to the US have also increased. Currently, especially for hot rolled products, only experienced traders and the market players who have well acquaintance at steel mills are lucky enough to find products to trade. Nevertheless, traders started to think that the price level has become very high. They are prudent about ordering products for June shipment at current price levels. Despite recent sharp price increases, the current levels of global prices are still lower than the average prices of 2005.