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Global steel prices continue to trend upward

PETALING JAYA: The steel market is expected to trend upward this year, according to a report by consultancy company operating in the steel sector worldwide, MEPS (International) Ltd.

The latest business in the US has been settled at marginally higher transaction values than in February. Producers are pressing for further increases next month, citing their growing input expenditure.

“They are claiming full melting schedules in the facilities open at present. However, several previous idled furnaces are set to come back on stream in the second quarter,” said MEPS in its latest steel news report on March 29.

Transaction figures continue to climb rapidly on a monthly basis and further movements are expected in April.

Meanwhile, rising outlay on raw materials, particularly the anticipation of much higher iron ore costs, is driving Chinese domestic market ever upwards.

“Despite some concerns over government intervention in bank lending, market sentiment is good. Quotations for export business are also increasing but overseas buyers are reacting quite cautiously, so not a great deal of orders is being concluded at present,” MEPS said.
Japanese producers have also announced they would be looking to implement substantial price hikes in April. The size of the eventual increase could depend on the outcome of ongoing raw material negotiations.

The integrated steel makers have reduced supply to the dealers while they try to meet strong demand from export markets and domestic auto manufacturers.

In South Korea, availability of coil is relatively limited. It is envisaged that Posco, the world’s second largest steel maker by market value, will adjust domestic selling values upwards, shortly, as prices of imported raw materials are expected to escalate in the months ahead. The company, along with other local steel makers, has already lifted export quotations.

The Taiwanese economy is also forecast to grow substantially this year. All this is helping to revive the steel market.

“Order intake is robust at local mills as customers buy ahead of announced and anticipated increases. The advance is thought to be relatively modest in order to help improve the competitiveness of downstream industries,” MEPS noted.
In Poland, however, demand is showing few signs of improvement. Distributors continue to order cautiously. Producers have pushed through a sizeable increase during recent settlements. Availability is relatively tight, as the mills appear to have reduced output.

Meanwhile, the economic outlook in the Czech/Slovak markets is poor.

MEPS said the steel-trading environment there is lethargic, as underlying demand remains muted. Buyers report that the domestic mills are offering restricted quantities in order to secure higher prices.

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