Finished Steel Selling Figures Rise
in Emerging Steel Markets
Brazilian steelmakers remain optimistic
about the growth prospects for domestic steel consumption. However, service
centres and traders are concerned regarding the upturn in the pricing positions
being adopted by their domestic suppliers. The majority assert that the latest
initiative is unsustainable and does not reflect real demand. Meanwhile, the
Instituto Ašo Brasil and the Ministry of Foreign Trade (MDIC) expressed their
reservations about the US Department of Commerce's Section 232 investigation.
Trading volumes were stronger than forecast, in the Russian Federation, this
month. The local distribution chain brought forward their procurement
programmes, in anticipation of further price increases from domestic suppliers.
Traditionally, the construction season commences in mid-April.
Business confidence is unchanged in India. Local service centres are reviewing
their inventories and are very cautious about order placement. The rise in the
buying price has not yet been reflected in distributors' sales to end-users.
Meanwhile, exporters plan to observe the global reaction to the re-opening of
the Chinese market, before closing any new deals.
Challenging trading conditions persist, in Ukraine. Distributors found it
difficult to pass on last month's price adjustment to their domestic customers.
Tight lending conditions continue to hamper investment in construction and
infrastructure projects. Moreover, export markets are difficult.
In February, Turkish steel distributors questioned the necessity of the latest
round of price hikes. The majority of these firms plan to keep stocks to a
minimum and only procure material on a requirement basis. Speculation is rife
that local steelmakers will push for higher prices, in March. Meanwhile, Turkish
exporters conveyed apprehension, following the disclosure that the US Department
of Commerce's Section 232 report advocated, as an option, that steel products
from Turkey should be subject to a 53 percent import tariff.
In the United Arab Emirates, market sentiment is poor amidst tepid demand.
Although inventories are quite modest, many distributors are able to wait before
ordering more material. Local forecasters expect demand in 2018 to remain
relatively unchanged from the previous year. Export opportunities are limited
outside the GCC region.
Purchasing volumes, in South Africa, are forecast to be stable, in the next
trading period. Local service centres and traders are optimistic that the
business environment will improve under President Cyril Ramaphosa's tenure.
However, mining-related sales and construction demand are slow. Previously,
state-funded social housing building and infrastructure programmes failed to
fulfil expectations of market participants.
The business climate, in Mexico, remains tepid. End-users are expected to source
more foreign material, blaming their domestic suppliers' unrealistic price
demands. Additionally, the National Chamber of Iron and Steel Industry (CANACERO)
called for the Mexican government to impose equivalent and reciprocal trade
restrictions, on steel imports from the United States, if local producers are,
in any manner, penalised under the Section 232 probe.
Source: MEPS -
Steel Review - February 2018 Edition
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