Increasing Scrap Prices Drives Steel Long Products Prices Up

Long product consumption continues at a low ebb in the US. Any improvement in nonresidential building and government financed infrastructure projects is unlikely to boost steel demand until late 2009/early 2010. Domestic mill activity is slow in Canada, with customers filling their requirements on a day to day basis because of the uncertainties in end-user markets. The price tendency continues to be negative.

In China, demand has improved noticeably now that construction activity is getting into full swing for seasonal reasons. Stocks have reduced considerably and prices are steady or firming. Market players are anticipating a small up tick in building work in Japan, where the severe financial downturn led to the cancellation or postponement of numerous developments. South Korean conditions have improved amidst expectations that government spending plans will stimulate steel demand quite soon. Similarly, state funded projects should help the recovery of consumption over the next few months in Taiwan.

A lack of sales and a surfeit of offers has contributed to lower prices in Eastern Europe. Construction activity continues to decline in several West European countries. Nonetheless, producers have been able to implement increases on the back of escalating scrap charges.

Source: MEPS International Steel Review