Commodities | Aug 16 2007
By Chris Shaw
Global steel prices fell by more in July than industry consultant MEPS had expected but the group sees prices as likely to stabilise leading into 2008.
Prices will vary from region to region however, MEPS expecting increases in the North American market as the current de-stocking period draws to a close and the market returns to a better balanced supply-demand position.
Offsetting these gains are expectations of lower prices in the EU as prices there return to more normal levels after moving too high early in the year as the seasonal slowdown takes hold.
Later in the year there is a risk long prices in the EU region fall further, as winter weather will bring about a reduction in construction activity.
Asian prices should be fairly flat through to the end of the year in the group’s view, as solid market conditions are offset by the threat posed by current oversupply in the Chinese market.
Early in 2008 the group sees scope for prices to push a little higher on the back of higher input costs and increased consumption, but as always China remains the swing factor given potential increases in production capacity in coming months.