Steel sheet prices will peak in mid-2004 when the effects of China’s production boom begin to affect the global market, according to metals consultant CRU International Ltd.
The global average price for steel sheet products will increase between 5 percent and 10 percent from now until the middle of next year, predicted John Johnson, CRU’s steel business unit manager, during a steel conference yesterday in Guangzhou, China.
"(Hot-rolled sheet) prices are predicted to continue climbing in all regions in 2004, probably peaking at around (U.S. $350 per ton) around mid-year," Mr. Johnson said in his presentation.
He also said the gap between global steel sheet production capacity and consumption will widen to 46 million tons next year from 35 million tons. Of the additional 11 million tons of overcapacity, China alone will generate 7 million of them, he said at the conference.
China’s steel sheet consumption is forecast to rise by more than 15 million tons or 25 percent, during the next 5 years, CRU data shows. This total includes hot- and cold-rolled and galvanized-sheet metal used in China’s automotive, household appliance, and construction sectors.
The increase will be met by rising production as new capacity comes on stream in China. As a result, net Chinese imports of steel sheet will fall by about one-third during the same period, Mr. Johnson said.
China’s sheet imports reached record levels in the first quarter this year before falling back as excess stocks were cleared. China implemented its latest set of tariff-rate quotas on steel sheet imports in May.
Mr. Johnson said China’s import demand has since started to recover and prices are rising again in line with strong consumption. R
Responding to Monday’s ruling by the World Trade Organization (WTO) that U.S. steel import tariffs violate trade laws, Mr. Johnson commented that European and Asian steel prices should make gains as a result. (Reuters)
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