Source: Shanghai Metals Market
The Asian average flat and long steel product composite prices both increased by approximately $25 per tonne, in February, compared with the previous month.
Mills attempted to recoup earlier rises in raw material costs. Furthermore, the appreciation of local currencies pushed steel selling figures upwards when denominated in US dollars.
Transaction values are forecast to continue to strengthen, in the near term. Demand should pick up, for seasonal reasons. Mill input expenditure is expected to remain at a high level. Speculative activity, in China, is likely to keep prices volatile, albeit on a broadly upward trajectory.
MEPS believes that steel selling figures will come under negative pressure by the middle of the second quarter. Reductions in steelmaking raw material costs are envisaged, during this period.
Coking coal contract prices, for the April/June trimester, are likely to be settled at significantly below the first quarter level of US$285 per tonne.
Furthermore, iron ore prices are expected to decline, as a result of high inventories in China and plentiful supplies from the seaborne market.