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STEEL BILLET MARKET ROUNDUP FROM
MEPS
In China, average provincial billet transaction values
were stable in December. Bearish dealers are forecasting buying activity and
selling figures to weaken next month, due to the proximity of the Gregorian
calendar New Year and Chinese New Year festival. Most have reacted cautiously to
the central bank’s decision to reduce the deposit ratio of commercial banks.
Questions have been raised on whether it is sufficient to revitalise demand for
finished steel and advance transaction values.
Indian market sentiment has continued to be unsettled by the deteriorating
domestic economic climate and the depreciation of the rupee. The latter has
inflated the cost of imported raw materials. Primary steelmakers’ nominal
selling figures were unchanged, whilst offers circulated by secondary producers
continued to shadow the cost of steelmaking ingredients – particularly, sponge
iron, pencil ingots and ferrous scrap.
CIS steelmakers are cautiously optimistic about the outlook for the first
quarter of 2012. The majority maintained billet utilisation rates the month at
November’s levels. The trading climate has remained subdued in key export
markets, particularly the MENA region. Quotations to Asian clients were raised
to account for currency fluctuations and the higher cost of steelmaking
ingredients – particularly, ferrous scrap.
Difficult trading conditions persist in Turkey. Domestic steelmakers issued
higher quotations in week 49, to justify for currency fluctuations and a rebound
in imported ferrous scrap offers. MEPS sources contend that the upward
adjustment is unsustainable as it was not supported by real demand. Shipments to
Middle Eastern clients have fallen short of market projections. In general,
foreign buyers plan to wait for evidence of price stability. This region has
been unsettled by strong price competition from CIS suppliers.
The Iranian billet market has entered a period of low demand. Importers are not
interested in foreign offers. Buying activity is forecast to improve after the
end of Muharram. MEPS sources report that both re-rollers and merchants need to
replenish depleted stock levels. CIS material is subject to a 4 percent import
duty.
Source: MEPS -
Semi-Finished
Steel Review
Also see: MEPS - Billet Price
Table
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