Emerging Market Steel Producers
Strive to Hold the Line on Prices
Brazilian steelmakers attempted to push
through a price increase for October’s production campaign. Distributors and
end-users condemned the latest initiative as “unwarranted”, considering the
relatively quiet business conditions and soft economic fundamentals. Buyers are
increasingly interested in purchasing third country material. Flat product
suppliers are focusing on overseas sales.
Russian trading houses believe that price cuts are likely, in the short term,
citing the close proximity to the end of the country’s construction season.
End-users are keeping stock levels very low and only purchasing what is
absolutely necessary, as a result. Export business is still slack, forcing
producers to lower their export price quotations.
In the Indian steel market, sales volumes and selling figures remain subdued.
Local trading houses are expected to persevere with cautious procurement
strategies next month, in anticipation of weak shipments to the construction
sector and other downstream industries. Third country import offers are
available but buyers show little interest.
Business activity in Ukraine remains reasonable. Transaction values moved up,
due to concerted efforts by the mills to cover their production costs.
Nevertheless, local stockists are keeping inventories well under control. The
year-end seasonal slowdown in demand is expected to begin, next month.
Procurement activity in Turkey was less vigorous, this month, than in September.
Flat product selling values declined, owing to soft end-user demand, lower
import quotations and decreasing raw material costs. Long product suppliers had
mixed success in stemming the downward movement in prices. They supplemented
poor domestic sales with increased shipments to overseas customers -
particularly, in Southeast Asia.
Downstream demand for finished steel in the United Arab Emirates fell below
market projections. Distributors are tightly controlling inventory levels
because they expect the negative price trend to continue. Availability of
foreign material at the ports is plentiful. Moreover, a pickup in shipments to
the building sector is unlikely, in the short term.
Trading conditions are still lacklustre in the South African market. Service
centres report that profit margins are being squeezed. With prices continuing to
move up, traders are only buying what they need. The construction sector
continues to suffer from a shortage of public and private investment.
Source: MEPS -
Steel Review - October 2017 Edition
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