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Steel prices slipping further in US, Canada, China, Japan and EU

UK based MEPS said that there is still downward pressure on US transaction prices, although the rate of decrease has decelerated. Mill outages continue, with operating levels quoted at between 40% and 50%, depending on the facility. MEPS said that “Deliveries are running late because of the production constraints. Nevertheless, distributors are keeping inventories at the lowest levels in many years as they react to the sharp decline in end user steel demand caused by the economic recession.” It added that "The Canadian market remains depressed due to auto production cuts and weak construction activity. New order intake at the steelmakers continues to be slow, with no improvement from the poor levels of late 2008. Both service centers and consumers are working with such reduced inventories that they have to request rapid deliveries when they do purchase from the mills. Distributors’ volumes are low and profitability is declining. Although some imports are available at figures below domestic ones, customers are loathe commit to offshore business." MEPS said that “The Chinese steel market responded quite positively to the government’s economic stimulus package and to the plans to revive auto, shipbuilding and machinery manufacture. These are expected to grow demand during the first half of 2009. However, the upward price tendency experienced over the last two to three months appears unsustainable for now. Domestic values rose in the first few trading days following the Chinese New Year holidays but have turned down since then. Steel exports continue to contract and overseas sales of manufactured goods are also declining due to the global economic crisis.”

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