Trade War Speculation Unsettles
Emerging Steel Markets
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.
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.
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).
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
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.
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.
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.
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 -
Steel Review - June 2018 Edition
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