Tag Archives: Steel Price Data

Section 232 Continues to Cast a Shadow Over Emerging Steel Markets

Brazil

Brazilian steelmakers are optimistic about the strength of domestic consumption in 2018, highlighting improving market fundamentals in both the local and global steel markets. Additionally, Brazilian exports to the United States are temporarily exempt from measures related to the Section 232 investigation.

Russia

Negotiations in the Russian Federation remain arduous. Trading houses continue to be frustrated with the pricing positions adopted by their domestic suppliers. The latest initiative is viewed as unwarranted and not supported by underlying demand.

India

The Indian steel industry is forecasting that underlying demand will remain strong until mid-June, supported by government infrastructure spending and strengthening consumer demand. Nonetheless, MEPS notes growing resistance from end-users to the recent price increases. Moreover, the Modi government signalled it planned to formally lodge a trade dispute against the United States, at the World Trade Organisation (WTO), if the Trump administration does not exempt Indian steel goods from rising tariffs.

Ukraine

Supply chain participants report no changes to business activity, in the Ukrainian steel market. Stockists are concerned about carrying too much inventory over the next two months, fearing a downward price correction. Export activity is stable, with prices under renewed negative pressure following developments in the Chinese market.

Turkey

End-user demand in Turkey is tepid, disrupted by Mustafa Kemal Atatürk (National Sovereignty and Children’s Day), and renewed political uncertainty. Presidential and parliamentary elections are scheduled for June. The depreciation of the Turkish lira against the US dollar further exacerbated the situation. Scrap brokers predict that the domestic mills will try to push scrap prices down again in the near future, as both export and local demand remains slow.

UAE

Challenging business conditions persist, in the United Arab Emirates. Distributors are adopting a “wait-and-see” attitude, expecting purchasing activity to slow down ahead of the festive month of Ramadan. However, the outlook for the remainder of 2018 is positive, after the announcement of new commercial, residential and infrastructure projects, in Dubai and Abu Dhabi. Outside the GCC region, export opportunities are limited.

South Africa

South Africa’s Department of Trade and Industry (DTI) failed to persuade the US government to exempt the country’s steel and aluminium exports, from the tariffs, stipulated in the Section 232 proclamation. In further submissions, the ministry proposed a settlement based on 70 percent of the 2017 exports as a quota to the US. South Korea negotiated a similar quota arrangement with provisions, in late March.

Mexico

Mexican steel traders retain a cautious outlook for the second quarter. Downstream buying activity is unsettled by the aggressive pricing strategies adopted by domestic suppliers. Moreover, developments across the border in the United States continue to be watched carefully. Meanwhile, the National Chamber of Iron and Steel Industry (CANACERO) pressed the government for additional measures to protect the domestic manufacturing and steel industries from foreign competition.

MEPS EU Average Flat Product Prices Slip But Long Product Values Recover

Flat product prices continued to fall in the latter part of June, in both the north and south of Europe. Basis numbers were driven down by the impact of inventory build-up and price pressure from third country imports. Market sentiment began to change in early July, as competition from overseas material reduced. Foreign offer prices increased and the expectation of the introduction of antidumping duties, on hot rolled and hot dipped galvanised coil, during the summer, also led to fewer import transactions. An extended period of destocking is coming to an end. End-user consumption is at a high level and service centres are beginning to re-order for the autumn.

Reacting to this change in market direction, a number of Western European steelmakers are now pushing for price increases of around €20/30 per tonne on all strip mill products, for September deliveries.

European long product producers began to target price hikes of €15/30 per tonne, at the start of July, citing higher input costs. So far, the response from buyers is fair. At least a part of the increase is likely to be achieved. The mills are bullish and, in some instances, they are already pushing for further increases.

Source: MEPS – European Steel Review – July 2017 Issue

STEEL PRICES RISE IN EMERGING MARKETS DESPITE SUBDUED BUYING ACTIVITY

According to MEPS, Brazilian service centres are concerned that the latest domestic price levels are not supported by market and economic fundamentals. Presently, most firms are purchasing material only on a requirement basis.

Challenging business conditions persist in the Russian Federation. Trading houses expressed bearish views over the growth prospects for domestic steel consumption in the February-April period.

The outlook for the Indian steel market is unchanged. Distributors remain divided about the government’s decision to extend the minimum import price (MIP), which elapses on February 4. Currently, nineteen products are covered by the framework.

Ukrainian steelmakers are divided over the growth prospects for the long products segments in 2017. In the past twelve months, underlying demand for finished steel products has consistently fallen short of industry projections – particularly, from construction firms and pipe fabricators.

Business confidence deteriorated in Turkey, this month. Local stockists contend that the re-emergence of price volatility in domestic quotations has made it a high risk to complete deals at this stage. The situation has been exacerbated by the strength of the US dollar against the Turkish lira and weak economic fundamentals.

The trading environment is unchanged in the United Arab Emirates. Local service centres are extremely reluctant to purchase material in what they deem as precarious business conditions.

South African distributors plan to persevere with conservative procurement strategies, next month. Shipments to the construction and infrastructure projects remain scarce. End-users intend to steer clear of substantial flat product purchases in the interim.

The outlook for the Mexican steel market is unchanged. Flat product spot market sales decreased. Bearish buyers are reluctant to purchase at current transaction values. The strong US dollar against the Mexican peso is also having a negative effect on sales.

Source: MEPS – Developing Markets Steel Review – January Edition

POSITIVE OUTLOOK FOR STAINLESS STEEL PRICES

Stainless steel transaction values climbed significantly, in November. MEPS All Products Average figure for grade 304 increased by 3.5 percent, month-on-month. The rise was predominantly due to the mills passing on to their customers their growing raw material costs, most notably for nickel. The metal’s price has been on an upward trend since September, with a sharp spike in the wake of the US presidential election.

Sentiment in the nickel market was positively affected, earlier in the year, by the actions of the Philippines government, closing several mines, on environmental grounds. Following on from Indonesia’s ban on nickel ore exports, this move suggested a likely tightening in supply, in the medium term. Both countries have confirmed, recently, that they will continue with their restrictions for the foreseeable future.

Although LME stocks remain at a comparatively high level, above 360,000 tonnes, an upturn in demand could lead to a supply deficit, with the consequent upward pressure on prices.

The LME nickel value soared in the immediate aftermath of Donald Trump’s election victory in the United States, as investors favoured commodities, such as metals, over stocks and shares. While many observers predicted that Mr. Trump’s election would engender economic chaos, the evidence suggests that his stated growth-friendly plans, such as corporate tax reform, deregulation and infrastructure spending, have been viewed positively by the markets.

In addition to economic growth, US stainless steelmakers are likely to be assisted by further protectionist measures, under the new regime.

Recent trade restraints, by the US, the European Union and others, have primarily targeted exports from China. The world’s biggest stainless steel producer has excess output capacity and more facilities are planned. With restricted access to overseas markets, China’s future strategy will have a major influence on the global supply/demand balance.

Source: MEPS – Stainless Steel Review – November Issue

NORTH AMERICAN STRIP MILL PRODUCT STEEL PRICES POISED TO RISE – MEPS

The downward trajectory of US strip mill product steel prices came to an end, in November. MEPS’ research shows that local steelmakers achieved at least part of their proposed increases or, at worst, prevented domestic values slipping further.

Amid a weak trading environment, a number of US steel buyers initially labelled the mills’ proposed price hikes as a ‘defensive move’ to halt the downward pressure on steel transaction values. Surging raw material expenditure supported mill efforts. Supply from offshore sources is extremely limited, largely due to ongoing trade defence measures.

Many buyers remarked, previously, that uncertainty surrounding the US presidential election had created a negative impact on domestic steel demand. A number of significant public construction projects were put on hold.

From MEPS research, in November, the general consensus view from steel market participants is that Donald Trump’s Republican election victory will have positive implications for the US steel industry. The new president’s ‘America First’ policy will likely feature increased infrastructure spending, which will boost steel demand from the construction sector, in particular. The expected greater use of import protection measures will also safeguard the interests of US steelmakers against the dumping of cheap imports.

However, further trade barriers will restrict choice for the US consumer. By limiting offshore supply options, steel buyers are likely to struggle to purchase their material at competitive prices. Furthermore, a major aspect of the electoral campaign was a promise to renegotiate several trade deals. If the US goes against the ethos of free trade, both regionally and globally, then steel exporters, who focus heavily on the world market, will be particularly affected.

MEPS believes that US transaction values are likely to strengthen, in the near term. Supply-side cuts and a slight demand pickup could prompt price increases at the beginning of 2017.

Source: MEPS International Steel Review – November 2016 Issue

MEPS – THE NORTH AMERICAN STEEL PRICE RECOVERY IS BROUGHT TO A HALT

The recent North American steel price recovery has proved short-lived as regional values continued their downward trajectory, this month.

From MEPS research, in September, one US market participant warned steel buyers to “hang onto their hats”. He predicted that US flat product steel prices could fall as quickly as they rose in the first half of the year.

The US steel industry is heavily dependent on the automotive sector. This month, US steel buyers remarked that auto sales have slowed down. Construction activity is at a relatively low level, while the energy sector is unlikely to recover until 2018 at the earliest.

The sustainability of the recent price rises, in the US, hinged upon supply-side considerations. The introduction of import barriers on a number of flat products initially supported the domestic producers.

However, steel imports, into the US, are steadily rising, month-by-month, from countries not covered by the trade cases. The restrictions are unlikely to be strong enough to reverse the negative price tendency that exists currently.

Furthermore, US crude steel production is well below capacity. The re-introduction of ArcelorMittal’s No 3 blast furnace at Indiana Harbour and the ramp up of the Big River facility, in Arkansas, will bring additional supply into the domestic market.

Source: MEPS International Steel Review – September 2016 Issue