March month-on-month (year-on-year) percentage changes:All Products Composite Price: +6.0 (+11.9)
As predicted, price increases were recorded for both flat and long products in March. Escalating international raw material values put significant upward pressure on steel selling figures this month. Mill delivery lead times lengthened as distributors purchased material to re-fill gaps in their inventories. End-user demand remained relatively weak. Credit availability was still a problem for many customers.
Expenditure on raw materials is expected to move up further in the short term. Tight supply in the scrap market, coupled with expanding demand for iron ore, will be the main drivers for this upward movement. The rising mill input expenditure will push selling figures for all steel products higher during the second quarter. European producers may restrict supply to ensure success of the upcoming price advances. Growing sales volumes over the next few months should also help mills to apply the increases in transaction values. An upsurge in raw material costs has occurred in the latter part of March. If this continues, our forecasts may be subject to an upward revision next month.
The all products average price is expected to stabilise in the third trimester as many customers take their summer vacations. Weakening end-user consumption over the winter months is then likely to result in some price slippage towards the end of this year. A revival in the market is then anticipated in 2011. This should help to boost steel prices in the New Year.