Section 232 Continues to Cast a
Shadow Over Emerging Steel Markets
Brazilian steelmakers are optimistic about the strength of domestic consumption
in 2018, highlighting improving market fundamentals in both the local and global
steel markets. Additionally, Brazilian exports to the United States are
temporarily exempt from measures related to the Section 232 investigation.
Negotiations in the Russian Federation remain arduous. Trading houses continue
to be frustrated with the pricing positions adopted by their domestic suppliers.
The latest initiative is viewed as unwarranted and not supported by underlying
The Indian steel industry is forecasting that underlying demand will remain
strong until mid-June, supported by government infrastructure spending and
strengthening consumer demand. Nonetheless, MEPS notes growing resistance from
end-users to the recent price increases. Moreover, the Modi government signalled
it planned to formally lodge a trade dispute against the United States, at the
World Trade Organisation (WTO), if the Trump administration does not exempt
Indian steel goods from rising tariffs.
Supply chain participants report no changes to business activity, in the
Ukrainian steel market. Stockists are concerned about carrying too much
inventory over the next two months, fearing a downward price correction. Export
activity is stable, with prices under renewed negative pressure following
developments in the Chinese market.
End-user demand in Turkey is tepid, disrupted by Mustafa Kemal Atatürk (National
Sovereignty and Children’s Day), and renewed political uncertainty. Presidential
and parliamentary elections are scheduled for June. The depreciation of the
Turkish lira against the US dollar further exacerbated the situation. Scrap
brokers predict that the domestic mills will try to push scrap prices down again
in the near future, as both export and local demand remains slow.
Challenging business conditions persist, in the United Arab Emirates.
Distributors are adopting a “wait-and-see” attitude, expecting purchasing
activity to slow down ahead of the festive month of Ramadan. However, the
outlook for the remainder of 2018 is positive, after the announcement of new
commercial, residential and infrastructure projects, in Dubai and Abu Dhabi.
Outside the GCC region, export opportunities are limited.
South Africa’s Department of Trade and Industry (DTI) failed to persuade the US
government to exempt the country’s steel and aluminium exports, from the
tariffs, stipulated in the Section 232 proclamation. In further submissions, the
ministry proposed a settlement based on 70 percent of the 2017 exports as a
quota to the US. South Korea negotiated a similar quota arrangement with
provisions, in late March.
Mexican steel traders retain a cautious outlook for the second quarter.
Downstream buying activity is unsettled by the aggressive pricing strategies
adopted by domestic suppliers. Moreover, developments across the border in the
United States continue to be watched carefully. Meanwhile, the National Chamber
of Iron and Steel Industry (CANACERO) pressed the government for additional
measures to protect the domestic manufacturing and steel industries from foreign
Source: MEPS -
Steel Review - April 2018 Edition
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