DEARBORN, Mich. This year
is on course to be a relatively flat year for steel and scrap
prices, largely due to macroeconomic concerns and low-cost
imports, according to IHS Global Insights John Anton,
noting that zinc prices are also likely to be range-bound, with
little to push them higher.
"The risk is firmly on the
downside," Anton, IHS economist and director of its Insight
Steel Service, told an audience during a panel on price trends
Tuesday at AMMs Galvanized and Coated Steel
Conference in Dearborn, Mich.
With Chinese macroeconomic
growth slowing its pace, Europe still poised for disaster and a
slow domestic recovery, there will be demand pressure on steel
prices, he said, also noting the effects of a slow housing
recovery and a large amount of domestic sheet capacity.
"Were not out of a
recession," Anton said. "Were not to pre-recession
levels. And oversupply could be a problem."
The U.S. construction sector
remains a barrier to price increases as well, with an excess of
strip malls, office buildings and factory space hanging over
the market. Housing starts are expected to rise this year, but
they still remain far below their peak thanks to excess
inventory, he said.
Meanwhile, the gap between
imported and domestic prices contributed to a flood of imports
early in the year, Anton said. "Weve seen some incredible
import spikes," he said. "Imports of plate have been
undercutting plate prices for months. Its started being
seen some in sheet (prices)."
Domestic prices for hot-rolled
sheet have remained at $34.50 per hundredweight ($690 per ton)
since mid-April, but are down from $37 per cwt ($740 per ton)
at the start of the year, according to AMM data.
The price gap between hot-dipped
galvanized sheet and imported product cant last, Anton
said, adding that the price for hot-dipped galvanized sheet is
about $130 per tonne higher in the United States than in China
The conference panelists were
bearish on the outlook for zinc prices, which can also affect
the price of hot-dipped galvanized sheet, depending on the
"If galvanizing demand drops, if
Europe becomes weak, if China softens morewe think those
are all downward price pressures," according to Lisa Reisman,
managing director of MetalMiner. "We think (the price of zinc
is) going to be range-bound this year."
Higher prices have little
support, Anton agreed, forecasting zinc prices in a range of
$1,800 to $2,150 per tonne this year.
Both Anton and Reisman cited an
available supply, thanks to high stocks of the metal in
warehouses, as one of the main factors that would weigh on