International prices of hot rolled coils is set to stabilise in the range $330 per tonne to $350 per tonne in the next couple of months according to the secretary general of the South East Asia Iron & Steel Institute secretary general, Iain Bartholomew.
Prices in the American markets at present are ruling at $390 per tonne while it is ruling at $370 per tonne in the Asian market. This according to Bartholomew is expected to hover around the present level for the few weeks and then fall to the level he has predicted.
With as much as 20 million tonnes of steel being bought by China from the international market the country plays a significant role in determining international prices and if there is a decline in procurement of steel from because the country has warned of imposing duties against dumping of Japanese steel, prices could fall further.
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The US war threat on Iraq according to Bartholomew however did not affect prices this time but, prices could move upwards if war broke out.
On the consumption side, Bartholomew said that the total consumption of steel is expected to be around 900 million tonnes in calendar 2003 against $902 million consumed last year. Excess capacity has declined considerably, but even then the global steel market is expect to see excess capacity around nine per cent in 2003.
China would consume around 200 million tonnes, of which it manufactures around 180 million tonnes. The rest is imported.
World steel production in 2002 increased by around 6 per cent. At 902 million tonnes, it was the best ever year in terms of consumption of steel. Asia contributed around 43.5 per cent, the European Union around 17.6 per cent, North America 13.7 per cent, and former USSR around 11.3 per cent.
South America contributed around 4.5 per cent of total world steel production, while Africa contributed close to two per cent, west Asia 1.4 per cent and Ocenia only 0.9 per cent.
Bartholomew said this ratio of production is expected to remain more or less the same this year too.