Strip prices stay firm, though scrap softens
Coil and plate prices remained firm last week, though the prices for rebar – used widely in construction - in some parts of the world softened.
Rebar offer prices in the Mediterranean came off by $10-15/t last week, but it is unclear for how long they will move downwards. Much will depend on whether construction demand remains firm. Some traders speak of scrap prices again rising in May. ArcelorMittal too considers the current weakness to be only a blip and expects prices to rise again shortly.
A major downside risk continues to be China. Recently it took further action to cool its apartment/house building sector, but this move is not expected seriously to dent local demand.
In contrast, offers for coil products, used in the automotive sector, continued to rise last week. Whilst iron ore and coking coal stay firm, it seems unlikely they will follow light long products and weaken.
Moreover the steel producers seem keen to take advantage of the improving demand, comments Roger Manser, managing editor of Steel Business Briefing. The World Steel Association is forecasting an 11% rise in demand this year. “But it is unclear to what extent this demand reflects stock-building and how much it reflects real demand,” Manser adds.
North European prices are currently around €580/t ($787/t). In the USA, sheet prices were about $740/s.t ($820/t) and not expected to correct before Q3; Russia was offering around $740/t fob, whilst Chinese tier-1 mills were offering 3mm-plus commercial quality coil early last week at $680-690/t fob.