LATEST FORECASTS FROM MEPS
Despite the small improvement in the average figure in March, we expect flat product prices to hold up next month before falling under the pressure from imports over the next four to six months. We do not anticipate a price collapse but a steady decline in transaction values is a distinct possibility over the period. We expect average figures to stabilise in the final quarter of 2006 and into the first trimester of 2007 and end the forecast time frame marginally above our previous prediction. The import pressure should ease somewhat as domestic demand improves in other parts of the world.
The North American long products sector remains quite fragile. The threat from imports is likely to be realised in the next few months. Despite improving demand as the construction season develops, we expect foreign material to adversely affect prices up to the end of this year. The impact will not be dramatic but is likely to be real. The Canadian market could be worse hit than the US.
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