Rampant steel price rises in EU market - MEPS

Tuesday, 25 Jan 2011

UK based MEPS said that although consumption has changed very little, domestic producers are attempting to lift second quarter offers because of raw material price developments and energy cost increases. Outlay on iron ore is forecast to rise and coking coal shipments from Australia are being affected by the floods.
An upsurge in steel purchasing activity is predicted over the next few months as distributors look to refill depleted inventories. Consumption should also improve this year. Consequently, MEPS forecasts steel values to advance considerably during the first half of 2011.
Prices for flat products picked up rapidly during the second half of December, driven by higher input costs and some restocking by distributors. Both rerollers and the integrated producers benefited from the increases. Third country values are also soaring, making material from those sources quite unattractive.
Long product values are currently rising very fast in the European market, following a concerted push by producers, due to the continuous surge in scrap prices. Most distributors only purchased relatively small quantities at the end of last year and now need to buy in order to increase their stock levels. End user activity has improved slightly but remains subdued.(Sourced from MEPS - European Steel Review)