DEVELOPING MARKETS HIGHLIGHTS – FROM MEPS INTERNATIONAL LTD

The business environment remains challenging in the Brazilian steel market. Local service centres plan to persevere with conservative inventory levels next month. There is reluctance on the part of end-users to commit to forward orders.

Russian steelmakers are faced with a dilemma of whether to ride out the difficult domestic trading conditions, or downgrade planned production targets. The strength of the US dollar against the Russian rouble has only exacerbated the situation. Local trading houses intend to maintain cautious buying positions next month.

The Indian steel industry is divided over the prospects for local steel demand and price direction in the first quarter of 2015. Difficult trading conditions persist in the Chinese steel market.

Ukrainian steelmakers are finding it difficult to fill order books. Shipments to industrial companies have continued to deteriorate in the trading period surveyed.

Price volatility has undermined market sentiment in Turkey. Underlying demand for finished steel products has fallen short of industry projections – particularly, from construction firms and pipe fabricators.

Procurement activity in the United Arab Emirates was weaker than forecast in the period surveyed. Emirati rolling mills opted to reduce their selling figures owing to the difficult market conditions and strong price competition from foreign sources.

Business sentiment remains subdued in South Africa. Local stockists expect sales volumes to stay muted over the holiday shutdown period.

Mexican transaction values have edged higher over the last month. Distributors are holding off purchasing until January to see how demand develops.

Source: MEPS – Developing Markets Steel Review – December Edition

GERMAN STEEL PRICE ROUNDUP FROM MEPS INTERNATIONAL LTD

Hot rolled coil basis figures have softened in Germany, according to the latest report by MEPS. Expectations for next year are poor as the economy is not performing as well as anticipated. There is little confidence in the marketplace. The pipemakers report reasonable activity but their margins are being squeezed by growing overseas competition, particularly from China.

In the commodity plate market, service centres are buying only what they need to cover immediate orders. They have been keeping inventories under control for some time and, now, many are destocking. Steelmakers are starting to lose some of the gains made at the end of the third quarter, partly due to intense import pressure.

Distributors are pushing for cold rolled coil price cuts on the back of softening raw material costs. Domestic suppliers have reduced their offers. There has been no revival in demand.

Construction-related demand for hot dipped galvanised coil is static. The auto industry is holding up, although sales of cars to Russia have dropped sharply in recent times. Basis numbers in the general market have succumbed to downward pressure, due to oversupply.

Mills have maintained their low carbon wire rod prices again this month but customers are calling for decreases. Recoil values have succumbed to negative pressure from declining scrap costs. In addition, the finished mesh market is very competitive at present.

Structural section sales volumes are poor where there is strong competition for the little business that is available. Nevertheless, suppliers have held on to prices during recent deals but some slippage could occur in the first trimester.

The rebar market is very competitive. Buyers have successfully pushed for lower prices as scrap values continue to drop and further decreases cannot be ruled out in a climate of subdued demand.

Steelmakers have failed to resist customers’ calls for merchant bar basis price cuts, for the third consecutive month. Purchasing activity remains cautious as buyers monitor the constant negative trend. There has been no recovery in business levels.

Source: MEPS – European Steel Review – December Issue

BELGIUM STEEL PRICE ROUNDUP FROM MEPS INTERNATIONAL LTD

Belgian hot rolled coil basis numbers are below those of a month ago, according to MEPS. Delivery lead times are short. Slit coil, that can be delivered very quickly, is extremely cheap, leaving very little margin for the distributor.

Third country import competition has impacted on commodity plate values in December. Domestic steelmakers have conceded another small discount for cold rolled coil during recent settlements. Chinese imports are competitive.

Drawing quality wire rod numbers have been rolled over from November. Steelmakers are not busy as demand is slow. Opportunities for export sales have allowed steelmakers to maintain structural section prices, in spite of cheaper scrap. However, resale margins are being cut.

In the rebar market, distributors are being very cautious and keeping inventories down as steelmakers continue to give away the advantages of cheaper scrap. There is also a threat from Turkish imports. Consumption of merchant bar is down in 2014. We have noted negative price movements since November.

Source: MEPS – European Steel Review – December Issue

NORDIC STEEL MARKET ROUNDUP FROM MEPS

Steel prices have recently held up better in the Nordic region than in continental Europe, according to MEPS. However, consumption of hot rolled coil is limited leading to increased competition between suppliers. The level of sales, in Sweden, has been boosted by demand from the construction sector due to the continuing mild weather.

Market activity, for cold rolled coil, is decreasing. Customers are trying to minimise their inventories as the year end approaches. Prices are falling more slowly in Scandinavia than in the rest of Europe. Supply chain participants in Finland think that the market will be strengthened by the rationalisation arising from the merger between SSAB and Rautaruukki.

The commodity plate market is weak. The conflict in Ukraine continues to adversely affect the exports of agricultural equipment. Local markets are subdued for makers of farming machinery and other engineering concerns.

Wire rod producers and customers will close for two weeks around Christmas and the New Year. This may help to balance supply and demand. Order intake, in Sweden, has been adversely affected by the precarious position of the new government. Structural section prices have recently edged downwards as a result of decreasing scrap costs. However, buyers expect producers to seek higher prices in the near future.

Suppliers expect to shift significant tonnages of rebar in December. However, with scrap costs reduced, rebar values have slumped. Demand remains fair, in the parts of Norway where wintry conditions have not arrived. Merchant bar consumption is disappointing. Sales volumes have decreased as the year-end approaches. Declining raw material costs have contributed to reduced selling values.

Source: European Steel Review Supplement  – December Edition

EU STEEL PRICES FALL IN LINE WITH DROP IN INPUT COSTS – TO 58 MONTH LOW

According to MEPS International Ltd, European demand for flat products remains lacklustre as many customers try to minimise their inventories before the close of the financial year. Although the mills are trying to resist calls for lower basis numbers, in the majority of cases they have failed. Prices have continued to fall, following the trend in raw materials. Offers from Asia are not particularly competitive at present but supply from domestic sources is plentiful.

In Germany, quarterly contracts for period one 2015 have not been finalised completely. Some business has already been concluded for January at prices below those published in the November issue of MEPS European Steel Review. The downward pressure is not from third country offers but from cheaper raw materials. Demand is stable at an annual level comparable to 2014. A number of service centres are selling very cheaply in order to reduce their stocks for their financial year-end.

Activity remains at a subdued level in France. End-users are waiting until the last minute to order steel, while demand from stockholders is weak. Mills have short delivery lead times, which allow distributors to keep inventories low. Activity derived from the auto sector has been slightly better in 2014 than the previous year but still remains quite modest. The rest of industry has already agreed a discount for December deliveries. Some buyers foresee the possibility of further slight erosion for the first trimester. Purchases will only be finalised just before the holidays.

There is no good news for sellers in the Italian steel sector, where basis numbers are constantly slipping. Buyers claim that reductions in raw material costs are now having a very big influence on steel prices. Moreover, demand is described as ‘dead’, with December being considerably quieter than is seasonally normal. Market expectations are for further price decreases in 2015, so customers are reluctant to commit to forward orders.

UK service centres are enjoying healthy levels of business, although growth has now slowed a little, ahead of the vacation. Demand is still good and their margins are better than a year ago. There is minimal speculative purchasing and, in general, inventories are in balance. There are stocks at the ports but most of the material is pre-sold.

Low demand, together with shrinking raw material costs, has led to declining prices in Belgium. Distributors from the Netherlands and Germany are selling cheaply across the border, threatening resale values. Service centres are desperate to empty their stocks before the financial year finishes at the end of December.

Basis figures continue to tumble in Spain, where real consumption is stable but buyers are delaying their purchases as they watch the constant cuts in the steelmakers’ outlay on raw materials. They anticipate lower steel prices in the future.

Source: MEPS – European Steel Review – December Issue

Siemens to modernize Wei Chih bar mill in Taiwan

  • In future, mill will be able to roll rounds with larger final diameters
  • Product portfolio widened to include flat and square bars
  • Optimized entry to cooling bed will improve surface quality

Siemens Metals Technologies has received an order from Wei Chih Steel Industry Co. Ltd. (Wei Chih) to modernize the company’s existing bar mill in its Tainan Plant. This will enable the Taiwanese steel producer to produce not only rounds with diameters up to 100 millimeters but also flat and square bars. The rolling train equipment as well as the entry into the cooling bed will be modified to avoid any scratch on the surfaces of the bars. Modernization work is scheduled to be completed by the middle of 2015.

Bar handling system from Siemens
Wei Chih was founded in 1982 and produces concrete reinforcing steel and structural steels for both the domestic market and for export to a number of countries all around the world. High quality rounds were added to the product portfolio a few years ago. Siemens supplied the bar mill in 1994, and a bar-in-coil mill in 2013. With cold charging the billets, it has an annual capacity of 450,000 metric tons, and produces rounds with diameters from 10 to 60 millimeters. After completion of the modernization, the mill will be able to roll not only rounds with diameters up to 100 millimeters, but also flat bars with cross-sections ranging from 25×3 to 100×36 millimeters, and square bars with cross-sections ranging from 11.3 to 60 millimeters. The rolling mill processes carbon and quality steels.

Siemens will supply the process equipment for the modernization project and assist Wei Chih with the engineering of the items it will provide. The entry into the cooling bed will be equipped with braking slides that have special plating to substantially reduce the risk of scratching the surface of the newly rolled bars. The cooling bed itself will be given a new rake system to handle the different geometries of the end products newly added to the range. An abrasive saw will be installed to cut the bars to length. Siemens will provide the bar bundling and handling machines with equipment designed to handle the new bar dimensions. Siemens will also supply the fluid systems and supervise assembly and commissioning work.

The Metals Technologies Business Unit, based in Linz, Austria, is one of the world’s leading lifecycle partners for the metallurgical industry. The Business Unit offers a comprehensive portfolio of technologies, modernization solutions, products and services, as well as integrated automation and environmental solutions for complete plant lifecycles.

For further information on solutions for steelworks, rolling mills and processing lines, please see: www.siemens.com/metals

Source: Siemens

Worldsteelnews.com is not responsible for the content of third party sites.