Advance/Decliner Index Has Slight Pullback. Our Advance/Decliner index fell to 88% from 94% last week, marking the sixth consecutive week above 80%, with continued strength mainly outside of China.

Our China index came in at 50% as pricing weakness persists due to
concerns about tight credit and high inventories as well as a slight
pullback in spot iron ore prices in the last two weeks. We expect low
volumes heading into the Chinese New Year will keep prices down before
climbing back up as demand strength returns after the holiday.

European Prices Surge; Flat-Rolled Posts Another Strong Week. The U.K.
and Europe each posted five price increases this week, followed by
China and Korea with four, while Japan, the Ukraine, and the U.S. had
three increases apiece. The CIS, Taiwan, and Vietnam had two price
hikes each, while Southeast Asia, the Middle East, Malaysia, Thailand,
Canada, Russia, Turkey, Iran, and the U.A.E. posted one price increase
apiece. China had four price decreases while India recorded two price
drops.

There were 11 price increases for flat-rolled products, followed by
rebar with eight, billet, pipe, and wire rod with five, while plate and
beam had four price hikes. Flat-rolled products posted three price
cuts, followed by billet with two, and beam with one decline.

Relative Domestic Prices Finish Strong in January. U.S. prices continue
to move up with particular strength in plate and rebar. U.S. rebar
prices were up 11% from December and have posted increases — off of
near-record lows — relative to China and Europe where prices have
increased modestly, and vs. Japan where prices have fallen 6%. Plate
prices rose 16% in January, and are up significantly relative to China
and Europe where prices are nearly unchanged from December. Absolute
hot-rolled coil prices in the U.S. were up 8% for the month, and were
up relative to China and Europe, and up sharply relative to Japan.
Domestic beam prices ended January up 5.6% and were up relative to
China where prices have risen 2% and up relative to Europe where prices
were flat and Japan where prices fell 5%.

Outlook. With the exception of China, global prices continue to rise on
high raw material costs, low inventories, and an improving demand
outlook. We think prices will begin to rise again in China when demand
returns following the February holiday.

Source: The Street

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