EU steel flat product prices to rebound in early 2013

According to a MEPS report published today, a steel price recovery is to be expected in Europe early in the New Year. This is seen as the result of a combination of factors, mostly on the supply side. These factors include reduced European steel production, lower imports and higher steel export volumes.

 

These factors will significantly tighten supply and, in turn, should (according to MEPS) lead to rising steel prices in the New Year.

 

For full MEPS report, see http://www.meps.co.uk/Keynote10-12.htm, taken from the European Steel Review.

 

blogger@steelonthenet.com

 

World steel prices: price recovery in the medium term

A few steel industry colleagues have been asking the www.steelonthenet.com team how we see world steel prices evolving in the medium term. In reply, looking the world economic picture as well as at probable raw material price developments, our assessment is that:

- steel prices will remain at H1 2009 levels for the next 6-9 months … meaning we see steel prices as essentially stable to Q2 2010;

- we then see prices recovering slowly. We predict a price recovery from Q2 2010 of perhaps 40% across the following two years [to mid-2012];

- we see further recovery of world steel prices to around 50-60% above Q2 2010 levels in 2013-2014.

This means therefore that (in our view) steel prices will take a little while [maybe 3 years or so] to recover to their end-2007 / early 2008 level, but that we do not foresee a return to the extraordinary prices levels of mid-2008 for some time.

blogger@steelonthenet.com

Green shoots of steel recovery?

The Baltic Dry Index [BDI] is frequently mentioned as a leading indicator of economic performance and indeed, the BDI started to collapse in June 2008 some time before the current credit crisis properly set in. For those unfamiliar with the index, it is a weighted basket of international sea freight rates for commodities such as iron ore and coal. Because the size of the shipping fleet is effectively fixed in the short-term, the assertion is often made that the BDI is an especially sensitive measure of the near-term commodity supply / demand balance …

 

We show the value of the index on our website, at http://www.steelonthenet.com/files/bdi.html. It is noticeable that after a 90% or so collapse in the last 12 months, the index is indeed picking up once more having doubled in value in the last few weeks.

 

So, the green shoots of recovery for the steel industry at last?

 

blogger@steelonthenet.com