Jul 27 2009
Turkish long product quotations were raised at the beginning of this month, but have since fallen back due to low demand. July offers shadowed the movement in semi-finished and scrap values. A similar adjustment was made to export prices. Sentiment in the flat products segment is still mixed. Erdemir introduced a new set of basis prices and lifted the value of their extras. Shortages resulted in a price spike in the first week. End-users saw their raw material costs sky rocket. Flat product prices have lost some ground since then.
The UAE is once again preparing itself for a period of low activity. Orders for steel material have already started to soften. This trend is expected to continue until the end of the holy month of Ramadan. The cost of imported material spiked this month owing to shortages fuelled by lower import volumes. Prices have since softened. Merchants are forecasting prices to be stable during the religious festival.
Sentiment within the Indian steel industry is still mixed. Flat product steelmakers are once again bullish after an upturn in local sales volumes. Domestic offers for flat rolled material have risen on average by Rs500-1,000 per tonne. The pick up in steel usage from automobiles and white goods manufacturers continued this month. In contrast, effective prices for long products are starting to weaken. The country is now entering a period of low seasonal demand. The annual budget did little to improve the industry's mindset. Long product producers were left disappointed over the absence of new infrastructure and rural housing projects.
Utilisation rates of Russian steelmakers have continued to rise but their counterparts in the Ukraine are still reluctant to follow their lead. There are still concerns over the debt levels of the Russian majors, but sentiment within the industry has strengthened owing to stronger shipments to the automotive and construction sectors. On average, the Russian producers are now operating at 70 percent of potential, with NLMK and Severstal leading the way. Ukrainian steelmakers are still operating below 60 percent.
Distributor stock levels in South Africa are still very low. The majority have been unwilling to replenish owing to infrequent purchasing activity. Confidence is still weak and local buyers remain bearish. AMSA's announcement of an August price rise resulted in a spike in orders in late June and early July. Highveld responded to its main competitors move with a price correction of its own and left its July offers unchanged but next month's adjustment will bring its basis prices into line with AMSA's.
The Brazilian steel market has entered a period of calm. Prices are exhibiting more stability and there are signs of month-on-month incremental improvements in real demand. Fiscal measures are improving demand for flat rolled material but more needs to done to assist the long product segments. Nonetheless confidence amongst steelmakers is on the mend. The import duties re-employed last month and higher international prices have given the local producers some breathing space. A few are now preparing to bring online idle production.
Trading activity in Mexico is starting to show signs of progress. Flat rolled product prices are beginning to rise in response to a small recovery in demand. A similar resurgence has occurred in the long products segment. The steelmakers raised their domestic offers twice in July. There are concerns that shortages may bring about artificially high transaction values. Presently, local producers are only operating around 55 to 60 percent capacity. Altos Hornos de Mexico SA (Ahmsa) has taken advantage of the lull in demand and has started to refurbish its blast furnaces.
Source: MEPS