Mexican steelmakers continually pressed for increased prices, in July, but mills offered a degree of flexibility and discounting when deals were finalised. The recent depreciation of the national currency against the US dollar has exacerbated the situation. Meanwhile, the National Chamber of Iron and Steel Industry (CANACERO) lobbied the new government for tougher measures to protect the manufacturing and steel industries from foreign competition. The previous Peña Nieto administration imposed commercial import duties on US goods totalling US$3 billion.
Brazilian steelmakers struggled to raise transaction values to distributors, in July. End-users remain risk averse. The majority plan to continue with cautious purchasing strategies. Price support from export demand is limited.
Russian trading houses plan to persevere with conservative inventory levels, reflecting a seasonal slowdown in end-user demand. They expect domestic suppliers will concede further price reductions, to fill their rolling schedules. Meanwhile, Russian steelmakers criticised the European Union’s decision to impose restrictions on imports of steel goods, this month.
Demand is tepid throughout India. Sales volumes have slowed in the country’s northern and central states. Stockists operating in these regions have begun to offer discounts to facilitate deals. Traditionally, the monsoon season ends in September. Both primary and secondary steel producers were wary to offer price reductions and more favourable payment terms, fearing such measures would be counterproductive.
The Ukrainian steel market is described as “steady but slow”, as the summer commences. Manufacturing activity has improved, although businesses are still reluctant to invest. The mills are targeting overseas markets to offload their surplus output.
Difficult business conditions persist in Turkey. Producers would like to implement a domestic price advance, citing the depreciation of the Turkish lira against the US dollar and rising international prices, but, so far, this has not proved possible. Sales to end-users and distributors remain tepid.
United Arab Emirates
Emirati service centres are wary of carrying too much inventory during the summer months. They note that it is risky to conclude any deals, at present, because of volatile import price quotations. Moreover, sales volumes are forecast to decline further, in August and September, as warmer temperatures are likely to curb construction activity. Export opportunities are limited outside the GCC region.
The South African market is very quiet, with little business activity of any significance taking place during the holiday period. Domestic buyers remark that their suppliers’ current initiatives to lift prices are ill-timed, counterproductive and would only escalate import tonnages. We note little appetite for purchasing, at present, among construction firms. Labour unrest and union difficulties add to the uncertain climate.
Source: MEPS Developing Markets Steel Review
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