April 1 (Reuters) - Global steel prices continue to fall
after hitting a record high early last year as the financial
crisis grew into a broad recession that has already engulfed
the United States and much of Europe, dampening steel demand.
Following are some forecasts for 2009 prices of hot rolled
coil steel per tonne recently announced by brokerages.
REVISED FORECAST FORECAST DATE
Morgan Stanley $502 (global) April 1 $619
MACQUARIE $447 (global) Mar 17 $509
UBS $459.5 (3,142 yuan, Chinese) Mar 16 N/A
GOLDMAN SACHS $536.1 (413 euros, European) Mar 13 480
"Steel markets are starting to look oversupplied as
inventories in China have reached record highs. We now forecast
global demand will contract around 11 percent in 2009.
"This would represent the first contraction in a decade, as
key end markets, such as construction and transportation, are
forecast to be in a deep recesssion, bringing global steel
consumption back to levels in 2005."
"Coal and iron ore price falls will knock at least
$150/tonne off integrated steel production costs. The critical
element for the market is how quickly demand can bounce
back...We now foresee that even by 2011, world demand will
remain just below the level achieved in 2007, suggesting a
prolonged slowdown and little need for new capacity over this
"China's stimulus package and revitalisation plan are
likely to intensify the volatility in the steel industry.
"We think this will induce a "W" shape in the steel price,
with the price falling first on over re-stocking before rising
as infrastructure demand picks up, then declining on lower
input costs and supply response, and recovering as overall
"Weaker economic data and anecdotal commentary from our
companies suggest underlying demand in Europe is currently down
20-25 percent versus the 18 percent contraction we had
"As a result we believe inventory run down will now take
2-3 months longer than we previously forecast."
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(Reporting by Miyoung Kim in SEOUL; Editing by Clarence