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.       CRU International Steel Price Comments 

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0.   Disclaimer


   Week Ending 1/3/02
The CRUspi index is unchanged this week at 70.3. Anecdotal evidence suggests that the price rises being attempted by mills for long products are meeting some resistance in the markets, particularly in Europe. Steel markets remain relatively quiet, as all parties await the Section 201 remedies, which will be announced by next Wednesday, 6 March. Our current view is that with prices recovering from their lows, and the US government's kindliness to foreign countries, it is unlikely that the tariff levels will be anywhere near the proposed 40%. It is probable we will see generous quota levels, with tariffs of around 20% on most steel products, while some specialist products may be excluded from the tariff regime. However, if the import restrictions are harsh, it is likely that there will be an increase in protectionism in other countries. In 2001, the USA imported over 29m tonnes of steel products, and the 16 products that may have restrictions placed upon them accounted for around 80% of these imports. As a result, it is feared that harsh import restrictions could lead to millions of tonnes of steel being diverted to other markets, which will force prices lower as most steel markets are already oversupplied. In response to this threat, Eurofer is reportedly preparing safeguard cases for 22 steel products, although these will only be undertaken if steel imports into the EU increase following the 201 ruling. In the Americas, Mexico is considering raising its import tariffs from 25% to 35%, and Brazil, Venezuela and Peru are all considering import restrictions. Elsewhere, Iran and Thailand both introduced import tariffs and the end of last year. Also in Asia, it is likely that Japan and other major steel markets in the region will implement some form of import restriction if their domestic markets come under threat from distressed sales.


 Week Ending 22/2/02
The CRUspi index is unchanged this week at 70.3. This week also marks the end of the month, with CRUspi up 0.4% since January. This is the second consecutive monthly rise, a feat which was last achieved in April 2000, and we believe this signals the turning point in the current price cycle. Although steel prices around the globe have remained stable in recent weeks, it is likely that we will see price gains in the near future for a number of reasons. Steel production, and also capacity in the USA, has been cut in western markets by sufficient amounts to match the downturn in global demand. Stocks in the USA and Europe were also drawn down over H2 2001, suggesting that buyers will be re-entering the market soon. In addition, economic indicators suggest that the US economy is beginning to recover, and the construction market in Europe, particularly Germany, seems set to improve from Q2 2002. Mills in Europe have announced price rises of ?10-40/tonne for Q2 deliveries across a range of steel products, and we may see these take effect over the coming weeks as Q1 order books are full for most products. However, we do not believe the full rises will be achieved, as the steel markets in Europe may come under increasing pressure from imports due to trade diversions from the USA. Asia, meanwhile, has been buoyed by China's entry into the WTO. The subsequent alteration to the import licensing situation and reduction in import tariffs resulted in speculative buying before the Chinese New Year. However, steel market fundamentals remain weak in Asia, and we do not believe that the region will see a sustained price recovery to the same extent as that seen in Western markets.


CRU is an independent publisher of a wide range of steel industry publications. The CRU SPI is the leading indicator for global steel market trends and is formulated weekly from a weighted basket of steel industry prices in steels main markets. The global market is split into three main areas being North American, European and Asian and each area has its own pricing index which is further split into 5 main sub-indices of hot rolled coil, cold rolled coil, hot dipped galv coil, rebar and beams. For more information on the indexes see http://www.steelpriceindex.com/.  and http://www.australiansteel.com/

CRU STEEL PRICE INDEXES AT February 15, 2002 (April 1994 = 100)

MONTHLY INDEXES CRU ASIAN REGIONAL BASE see  www.steelpriceindex.com  for full current and historical details.

February 2002          HR COIL-61.3_________ H D GALV-68.1_________ REBAR-65___________BEAMS-62
January 2002          HR COIL-61.3_________ H D GALV-68.1_________ REBAR-65___________BEAMS-62

December  2001    HR COIL-58.1__________ H D GALV-66_________ REBAR-66.7___________BEAMS-62
November  2001    HR COIL-59.7__________ H D GALV-68.1_________ REBAR-67.7___________BEAMS-62
October  2001        
HR COIL-61.3__________ H D GALV-72.3_________ REBAR-69.___________BEAMS-62
Data and Commentary provided under licence from CRUspi T, the leading Indicator for Global Steel Trends T and database rights CRU International Limited 2000.   All rights reserved. See CRU International at http://www.cru.co.uk/

Prices quoted are mid-rates which should be taken as a guide only. All care is taken in their compilation but no responsibility is accepted for any errors.   See http://www.australiansteel.com/  for current rates and historic rates for all currencies.

Australian Dollar against foreign currencies  (Indicative Mid rates at business close)
4 March  2002. USD-0.5179___British Pound-0.3654__Euro-0.5989_____Japanese Yen-69.06______Malaysian Ringitt-1.961________NZDollar-1.2249______Sth  African Rand-5.838____Korean Wan-682.8_____Taiwan Dollar -18.15_______Thai Baht-22.617

15th February  2002. USD-0.5172___British Pound-0.36119__Euro-0.5923_____Japanese Yen-68.68______Malaysian Ringitt-1.965________NZDollar-1.2236______Sth  African Rand-5.916____Korean Wan-677.9_____Taiwan Dollar -18.12_______Thai Baht-22.548

February 2 2002. USD-0.50827___British Pound-0.35885__Euro-0.5899_____Japanese Yen-67.982______Malaysian Ringitt-1.934________NZDollar-1.218______Sth  African Rand-5.932___Korean Wan-667.2_____Taiwan Dollar -17.765_______Thai Baht-22.39

January 7, 2002 USD-0.51944_____British Pound-0.35939___Euro-0.58036_____JapaneseYen-68.050______Malaysian Ringitt-1.9738______NZ Dollar-1.2103___Sth African Rand-6.2674______Korean Wan-677.39____Taiwan Dollar -18.154______Thai Baht-22.803

December 7, 2001. USD-0.50539_____British Pound-0.36011___Euro-0.5789_____JapaneseYen-64.79______Malaysian Ringitt-1.958______NZ Dollar-1.242 ___Sth African Rand-5.67______Korean Wan-654.08____Taiwan Dollar -17.733______Thai Baht-22.58

4  OZFOREX  Market Commentary  (See Disclaimer below)

For Details of OZFOREX's full range of information and services click here. (or  goto http://www.ozforex.com.au/)  

4th March   2002.  Last Week Recap
The raft of economic data last week proved quite promising for the global growth outlook. In the US Q4 GDP data was revised upwards, construction spending and ISM also surprised on the upside. In Europe German IFO data was stronger than expected but to the disappointment or euro bulls the euro could not manage a rally on the back of it. Last weeks comments by Greenspan indicate they will leave rates on hold at the 19 March FOMC meeting but also confirmed the view that the Fed is cautiously optimistic about a sustained recovery.
The A$ closed last week at 0.5189 having started the week at 0.5125. The Euro closed last week at 0.8650 having started the week at 0.8770. US$/JPY closed last week 133.35 having started the week at 134.05

The Week Ahead 
AUD: Foreign fund managers were nibbling at the Australian Dollar last week but that's all it takes to get it moving higher. The 0.5200-0.5230 area remains a formidable resistance zone but after so many attempts perhaps the selling has been eroded and this time it can break higher. This week the RBA meets on rates and the consensus is for no change. The Australian economy continues to outperform and business investment indicators are encouraging. We remain bullish on the Australian Dollar in the medium term but note the strong technical resistance level capping the market at present.

5  BASE METAL PRICES  (all indicative cash prices only US Dollars per Metric Tonne)
March 1, ____Aluminium-$1384_______Copper-$1531,______Nickel-$6,040_____Tin-$3,820___Zinc-$790
February 15, ____Aluminium-$1370_______Copper-$1593,______Nickel-$6,115_____Tin-$3,710___Zinc-$769
February 1, ____Aluminium-$1354_______Copper-$1514,______Nickel-$5,900_____Tin-$3,990___Zinc-$766
January    07,___Aluminium-$1337_______Copper-$1446,______Nickel-$5,910______Tin-$3,885___Zinc-$813
6  STEEL COMPANY  SHARE PRICES  (Indicative only)
March 4 2002    BHP (BHP) -$11.73_________ONESTEEL  (OST)-$1.43_____HOWARD SMITH (SMI)- 14.82 _______SMORGONS  (SSX)-$1.60________SIMSMETAL (SMS)-$6.68__________All ORDS INDEX-3369

February 15, 2002    BHP (BHP) -$11.87_________ONESTEEL  (OST)-$1.41_____HOWARD SMITH (SMI)- 14.82 _______SMORGONS  (SSX)-$1.40_________SIMSMETAL (SMS)-$6.97__________All ORDS INDEX-3420

February 1, 2002    BHP (BHP) -$11.30_________ONESTEEL  (OST)-$1.31______HOWARD SMITH (SMI)- 14.82 _______SMORGONS  (SSX)-$1.32_________SIMSMETAL (SMS)-$6.15__________All ORDS INDEX-3386

Janaury  07, 2001    BHP (BHP) -$11.24_________ONESTEEL  (OST)-$1.11______HOWARD SMITH (SMI)- 14.82 _______SMORGONS  (SSX)-$1.01________SIMSMETAL (SMS)-$6.05__________All ORDS INDEX-3385


These headlines and the linked news articles are  published by Industry Search.com.au or  moreover.com 


Smorgon Steel eyes Mayne approach to branding


Smorgon Steel Group Ltd is considering rationalising its portfolio of brands, taking an approach similar to Peter Smedley's rebadging of Mayne Group.



Major resource/farming conference starts Tuesday


Farmers, miners and investors will focus on continuing strong signs from the rural sector at the nation's biggest agriculture forecasting conference, which begins Tuesday.



US Steel workers rally to demand 40% import tariffs


Thousands of workers in the ailing US steel industry massed Friday outside the White House to demand President George W Bush impose 40 per cent tariffs on steel imports.



End to BHP strike action hinges on weekend talks



A 10-day strike by South Australian BHP steelworkers could end on Monday, if weekend talks between unions and the company are a success.



Bush steel decision looms amid broader trade issues


President George W. Bush is deciding whether to impose new tariffs on steel imports at a key juncture in global trade talks.




BHP strike threatens to spread to tens of thousands

Strike action by BHP Steel workers looked set to spread this week with the potential to force tens of thousands of stand-downs in related industries, unions said Monday.



Smorgon says its turned a corner after difficult yr

Smorgon Steel Monday said it has turned the corner after 2000/01, the steel producer's most difficult year on record


OneSteel expects market conditions to remain stable

OneSteel Ltd Tuesday said it expects market conditions to remain relatively stable for the second fiscal half.


OneSteel expects market to stay flat to end 2002/03

BHP spin-off OneSteel Ltd Tuesday said it will focus on cutting costs and paying down debt while the market remains flat, after reporting better-than-expected net profit for the first half.



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