Tag Archives: INDIA STEEL

Uncertainty and Price Volatility Unsettle the Emerging Steel Markets

Brazil

Brazilian distributors are extremely reluctant to purchase material in, what they deem as, precarious business conditions. End-user groups are acquiring material only for their short-term needs. Price support from export demand is negligible. The Instituto Aço Brasil (IABr) reports that, in July, domestic production of finished steel totalled 1.903 million tonnes – up 2.7 percent compared with the previous year’s figure. Meanwhile, steel imports increased by 1.1 percent, year-on-year, to 177,000 tonnes.

Russia

Russian steel producers are divided about the prospects for domestic steel consumption in the final four months of 2018. Bearish trading houses are booking for only immediate requirements, citing the uncertainty about whether industrial activity and construction work will improve. Project completion is usually expedited before the onset of the winter.

India

Purchasing volumes in India are forecast to be stable, in the next trading period. Potential customers are staying out of the market. Price volatility is hampering trading. Stockists are forecasting that sales volumes will begin to improve from mid-October onwards.

Ukraine

Ukrainian steelmakers are expected to push for price increases next month, despite mediocre demand from pipe fabricators and the construction sector. Distributors are postponing forward procurement decisions, owing to their tepid sales and tight cash flow.

Turkey

The economic crisis is escalating in Turkey. MEPS notes little appetite for purchasing, at present, among manufacturing and construction firms. Producers failed to stabilise transaction values for both flat and long finished steel products. Downward price pressure is being exacerbated by weakening market fundamentals and the depreciation of the Turkish lira against the US dollar. Sales to end-users and distributors are forecast to be tepid, in September.

UAE

Buying activity in the United Arab Emirates is weaker than forecast, this month. Service centres are reluctant to purchase material, citing volatile import price quotations and the Eid al-Adha holiday. Export opportunities are limited outside the GCC region.

South Africa

The prognosis for the South African steel market is unchanged. The likelihood of improvement, in the fourth quarter, is minimal. Steel-consuming engineering and manufacturing firms are reluctant to increase production capacity in the absence of a sustainable upturn in end-user demand. Stockists reiterate that their suppliers’ plans to lift prices, for September deliveries, are counterproductive and would result in an escalation in import tonnages.

Mexico

Mexican steel traders report that domestic material is overpriced. The majority of these firms plan to closely monitor the domestic-import price premium before deciding their source of supply. Similarly, end-users remain hesitant about purchasing at current market price levels.

 

Source: MEPS Developing Markets Steel Review

 

Global Steel Prices Stabilise Amid Uncertain Outlook

Uncertainty Dampens Trading Activity in Emerging Steel Markets

Difficult trading conditions persist in Brazil. Buyers started to push for lower prices, in view of the downward movement being witnessed in other global steel markets.

Russian steelmakers are under pressure to lower plant utilisation rates to support transaction values. Market fundamentals remain weak. Local trading houses are booking for only immediate requirements due to price fluctuations and working capital problems. Shipments to tube fabricators, OEMs and mechanical engineering companies continue to underperform expectations.

Business sentiment deteriorated in India. Stockists operating in states, adjacent to the Bay of Bengal, witnessed a fall in business activity with the onset of the monsoon season. Meanwhile, steel manufacturers hoped that steady pricing, in July, will persuade customers to place orders rather than postponing purchasing decisions.

The Ukrainian market is slow ahead of the summer vacations. Order intake at the mills is very subdued, with few deals being concluded. Transaction figures fell as producers became eager to book business.

Procurement activity in Turkey is forecast to pick up after the holiday period. However, cautious service centres are booking for only immediate requirements, in anticipation that the revival will be short-lived. The third quarter is usually a slow season for the local steel industry

The United Arab Emirates market is very quiet, with no business activity of any significance taking place during the holy month of Ramadan. Domestic producers continually speak of higher prices but they are flexible when there is business to place.

Source: MEPS – Developing Markets Steel Review – June 2017 Edition

DEVELOPING MARKETS HIGHLIGHTS – FROM MEPS INTERNATIONAL LTD

Brazilian steelmakers attempted to push through a price increase for October’s production campaign. Predictably, distributors and end-users have been reluctant to commit to forward orders.

Russian trading houses remain adamant that the latest initiative to advance flat product transaction values does not reflect real demand. Meanwhile, long product steelmakers have again delayed releasing their November basis quotations.

Negative price expectations have gained momentum in India. Local steelmakers are faced with a dilemma of whether to attempt to ride out the difficult domestic trading conditions, or downgrade planned production targets. Meanwhile, the Chinese steel market remains unsettled. Distributors and downstream industries plan to avoid holding or building inventory in the interim.

Ukrainian finished steel prices have continued to trend downwards. The local association of metal producers, Metallurgprom, has forecast that crude steel production in November will reach 2.06 million tonnes – up 1.9 percent compared with September’s output.

Turkish steelmakers have struggled to adapt to October’s unpredictable business environment. Local steel traders are booking material for only short term needs, in anticipation of continuing price reductions.

Procurement activity in the United Arab Emirates was less vigorous, this month, than in September. Local stockists have been wary of finalising purchases in a falling market. Meanwhile, rolling mills opted to reduce their selling figures owing to the difficult market conditions and strong price competition from foreign sources.

Weak underlying demand remains a constraint on Mexican steelmakers’ ambitions to lift transaction values. Meanwhile, the National Chamber of Iron and Steel Industry (CANACERO) has welcomed the government’s decision to impose a temporary 15 percent import tariff on five steel products – including cold rolled coil and wire rod. This measure will be in place for a period of six months.

Source: MEPS – Developing Markets Steel Review – October Edition