Posted on 06 Apr 2010
Steel tariff rising in developing markets in general
Turkish steel manufacturers have increased their asking prices a couple of times during March particularly in the case of long steel products. It is believed that utilization rates shall continue to be at the current levels in near future i.e. until demand of construction steel improves or production cost stabilizes. Exporting companies have experienced buyer apathy in traditional overseas markets. Domestic orders for flat steel products also slowed down. It is expected that Erdemir shall soon raise its basis values. Higher HR prices during March were attributed to the absence of competitive import offers whereas new CR quotations were attributed to the shortage of the material. However, decline in HDG basis value was not expected by many market players.
Difficult trading conditions persisted in United Arab Emirates. Markets? low requirements have been ineffective as steel prices continue to rise. Local distributing companies and consumers reacted to March import offers with caution. Agreed deals were very few in number and bookings were mostly for small lots. Experts have said that current prices are unsustainable and the situation may lead to price correction as soon as May or June. Domestic rebar manufacturers have increased their ex-work asking prices in order to reflect increased cost of production.
Steel tariff in India was destabilized by uncertainties during the month of March. Manufactures raise their domestic offers after 2% increase in excise duty. The market is expecting further price adjustment of 1000 Indian rupees per ton to 1500 Indian rupees per ton this month. Steel manufacturers have already alerted their customers to expect it. Most of the manufacturers have cited increased demand as well as rising cost of production due to a material prices being the reasons of price hikes. Annual coking coal and iron ore supply contracts are being negotiated these days. Manufactures of long steel products have struggled with price volatility in the case of semis as well as iron scrap market.
Market sentiments are showing elements of improvement in South Africa. Highveld and ArcelorMittal of South Africa are expecting that domestic construction sector shall expand during the second quarter of this year. Requirement of steel is likely to be stimulated by public-sector infrastructure investments. However, the outlook of private capital investment is less certain. The market is largely expecting AMSA to raise its April offers in order to cater for increased cost of production due to rising raw material prices.
Steel manufacturers of Brazil have once again decided not to increase domestic steel quotations. Concerns persist that the volatility of raw material prices shall translate into much higher cost of finished steel sooner or later. Steady invented level and the influx of cheaper imported steel from China and Turkey continued to retain the situation. If you manufacturers offered special discounts to their customers in order to attract attention and filling their order books.
Steel industry of Mexico is looking forward to resumption of domestic demand. Construction steel might receive temporary boost from infrastructure development projects. Requirements of flat steel have also improved a bit. However, market outlook on the whole is not exciting. Any recovery in market activity is likely to be slow and protracted. Consumers hardly accepted price hikes of March and most of them procured supplies for short-term requirements only.
Steel manufacturers of Russia are getting ready for expected recovery in domestic demand during April to May. Traditionally, it is the duration of strong demand from construction sector. It is expected that long steel product manufacturers shall pursue higher domestic and export prices. Due to domestic shortage, manufacturers were forced to increase their payments for purchasing scrap in order to feed to their manufacturing processes. However, it is believed that more quantity of various types of scrap shall be available in the days to come as weather conditions are improving.
