Year Ends On A Gloomy Note

摘要

US strip mill supplies are plentiful. Stock levels at the service centres are not yet sufficiently adjusted and have, in fact, started to climb again. Buyers remain reluctant to commit to large forward orders. Market activity is very dull with no pick-up envisaged until at least the second quarter 2002. Prices of some products continue to weaken. Real consumption has declined, particularly from the auto, domestic appliance and construction sectors. Annual contract negotiations for next year are currently underway with these companies. They are reported to be pushing for price reductions. Nucor is attempting to raise prices by 10 US dollars per ton on 1 January with another, similar sized increase, scheduled for 1 February. Ispat Inland is reported to be trying to hike values by 20 US dollars per ton at the start of January. Others are following the move. Import tonnages are down substantially.An early turnaround in the Japanese economy is unlikely. The outlook for the steel sector is pessimistic as both home and overseas demand continues to recede. Nevertheless, production cutbacks by the integrated mills are finally improving the supply/demand balance and domestic inventories of strip mill products, although still far too high, have reduced significantly. New arrivals of imported strip have dropped oft quite markedly because of the low Japanese prices compared with international values. Consequently, quayside warehouse inventories, as of end October 2001, fell 9 percent from September - the fifth consecutive monthly drop.