Steel market fireeast ft newer stability Oversupply impacts Asian steel markets prices slide

摘要

The steel market, currently in a slump due to Chinese oversupply, is expected to recover with declining inventory and production volume. Recent market data indicates that domestic inventory is waning, steel purchases are recovering and distribution prices are stabilizing. As Chinese and Japanese steel markets are also showing signs of recovery or stabilization, a slight price increase is expected in the second half of this year.US steel prices are expected to climb from their current level throughout the year, but the slope is expected to be very moderate. Significant price cuts were anticipated in January. The only positive note on pricing in Asia is that the rate of decline should ease and a modest upturn in prices is possible in the second half of 2006. We believe that drastic action to curb output growth will be taken in China during the first half of next year. Moreover, higher export activity will ensue from all the main Asian steel producing countries.Meanwhile, short term outlook for long product prices remains weak. MEPS said that values are likely to slide over the next few months in all product categories as oversupply hits the markets. Higher export volumes and further production cutbacks should stabilize the situation in a few months' time. A slow price improvement is anticipated through the summer months and into the year-end, added the consultancy.