Tag Archives: South Africa

Slow Seasonal Demand and Trade Sanctions Affect Steel Prices in Emerging Markets

Mexico

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.

Brazil

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.

Russia

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.

India

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.

Ukraine

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.

Turkey

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.

South Africa

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

Temporary Safeguard Measures Unsettle EU Steel Market

Trade War Speculation Unsettles Emerging Steel Markets

Brazil

Challenging business conditions persist in Brazil. Domestic buyers remark that the current initiative to lift prices is ill-timed, counterproductive and would only escalate import tonnages.

Russia

Russian trading houses are booking for only immediate requirements due to price fluctuations and working capital problems. Activity deteriorated further, once the 2018 FIFA World Cup started. Shipments to construction and infrastructure projects remain steady, but demand from the commercial and private residential building sector is weak. End-users continue to experience financial problems.

India

In India, steel distributors, operating in southern states, witnessed a fall in business activity with the early onset of the monsoon season. Buyers are reluctant to purchase finished steel material and are waiting for prices to decline. Meanwhile, the Modi government announced that it will impose retaliatory tariffs on US finished steel goods (effective August 4).

Ukraine

The prognosis for the Ukrainian steel market is unchanged. Bearish dealers prefer to wait and observe the current market situation. Buying sentiment is shaped by expectations of further price fluctuations. Exporters lifted selling figures, actioned by an upturn in the cost of billet, slab and steelmaking raw materials.

Turkey

Challenging trading conditions persist in Turkey. Deliveries to downstream steel consuming industries remain slow, amid weak post-Ramadan demand growth and political uncertainty stemming from the country’s presidential and parliamentary elections. Additionally, exporters report that the tariffs on steel, imposed by the United States, have increased the competitiveness of their finished steel products, relative to their Canadian, Mexican and European counterparts.

UAE

Emirati service centres are extremely reluctant to purchase material in, what they deem as, precarious business conditions. Shipments to the construction sector and pipe fabricators remained slow in the trading period. During the summer months, building activity is constrained by high temperatures. Export opportunities are limited outside the GCC region.

South Africa

The trading environment remains downbeat in South Africa. Distributors condemned the latest upward adjustments as “unwarranted” given the current trading climate. Construction activity in the public sector is at a standstill, at present, as the market awaits government decisions on new investments.

Mexico

Purchasing activity remains moderate in Mexico. The majority of local stockists are refraining from signing any contracts at the moment. Shipments of finished steel products to the United States have halted, this month, due to uncertainty over US trade tariffs.

Source: MEPS Developing Markets Steel Review

People also read: EU Steel Prices Slip As Purchasing Slows

DEVELOPING MARKETS HIGHLIGHTS – FROM MEPS INTERNATIONAL LTD

Brazilian steelmakers have begun to lower production targets in reaction to weak underlying demand, high inventory levels and negative price sentiment. The Instituto Aço Brasil (IABr) has reported that finished steel sales in the home market during May totalled 1.49 million tonnes – down 1.3 percent, compared with the previous month’s figure. Meanwhile, the Brazilian flat steel distributor association, INDA, has indicated that imports of flat steel products totalled 175,757 tonnes – a fall of 19.6 percent.

The outlook for the Russian steel market is unchanged. Domestic steelmakers have delayed releasing their preliminary July basis quotations for both flat and long finished steel products.

Ukrainian trading houses remain bearish about the prospects for domestic steel consumption in the remainder of 2015. However, the local association of metal producers, Metallurgprom, has forecast that crude steel production in July will total 2.3 million tonnes – up 5.6 percent compared with May’s output figure.

Buying activity has slowed in Turkey. End-users have begun to press for lower prices, in view of the downward movement being witnessed in other global steel markets.

The trading environment has weakened in the United Arab Emirates. Stockists do not expect to witness a recovery until after the Eid holidays, which mark the end of the Ramadan festival. Local steel producers have also faced stiff price competition from Chinese, Indian and CIS suppliers.

In South Africa, deliveries to downstream steel consuming industries have slowed, amid negative price expectations and weak underlying demand growth. The South African Iron & Steel Institute (SAISI) has stated that imports of finished carbon and alloy steel products totalled 101,188 tonnes in April – down 28.7 percent, month-on-month.

Source: MEPS – Developing Markets Steel Review – June Edition

WEAK DEMAND GROWTH UNDERMINES PRICE SENTIMENT IN EMERGING STEEL MARKETS

Brazilian domestic steel distributors have begun to press for additional price concessions from their local suppliers. The Instituto Aço Brasil (IABr) has reported that finished steel sales in the home market during April totalled 1.51 million tonnes – down 22.0 percent, compared with the previous month’s figure.

Difficult business conditions persist in the Russian Federation. Local trading houses plan to postpone purchases until the pricing scenario is more transparent. Domestic steelmakers have delayed releasing their preliminary June basis quotations for both flat and long finished steel products.

India’s Ministry of Steel has proposed imposing stricter quality controls for semi-finished and finished steel products imported into the country. If the new measures are formally approved, materials covered by the new codes would have to be certified by the Bureau of Indian Standards (BIS).

The market remains challenging in Ukraine. The May trading period was shortened by the close proximity of the Easter and national holidays.

Turkish steelmakers have had mixed success in their efforts to obtain higher transaction values to distributors. The strength of the US dollar against the local currency remains a problem.

Uncertainty continues to unsettle business confidence in the United Arab Emirates. Local distributors are forecasting no significant price recovery in either the flat or long products segments in the interim. The majority plan to purchase only on a requirement basis until the pricing scenario is more transparent.

South African service centres are growing more pessimistic about the prospects for domestic steel consumption in 2015. Deliveries to downstream industries continue to underperform.

Challenging business conditions persist in Mexico. Local steelmakers are expected to shadow the pricing strategies of their US counterparts next month.

Source: MEPS – Developing Markets Steel Review – May Edition

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