World steel prices drop to 5-year low in December - MEPS

Manufacturers remain motivated to boost sales, and their proposals to increase prices have so far been unsuccessful as customers see raw material prices falling. Consumption outlook remains healthy for now, but service centers are experiencing a seasonal decline in sales activity. There is more than enough supply on the market and stocks range from moderate to high. In Russia, sales remain stable.

Ongoing weakness in raw materials continues to weigh on steel prices in China. This is happening against the backdrop of sluggish domestic demand amid slow production growth, low demand from construction and infrastructure projects. At the same time, steel output continues to rise. In response to a persistent surplus of steel products in the local market, manufacturers are looking for profits from sales in overseas markets. China's export volume reached a new high in November. At the same time, prices fell, leading to complaints from a number of countries whose producers suffer from cheap imports.

The relatively high price of flat products in the United States, compared to other countries in the world, continues to attract imports. Offshore material entering Canada no longer has such a significant price difference compared to domestically produced material, because foreign suppliers are concerned about the punishment of dumping. Service centers keep stocks stable. The demand mainly comes from the automotive and energy industries.

Recent statistics show that falling business spending has plunged the Japanese economy into a deep recession in recent months. Apparent steel consumption fell by almost 7 percent in a month.