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Steel markets in developing nations weighed down by uncertainty - MEPS

Steel News - Published on Tue, 20 Dec 2011

UK based MEPS said that the Brazilian steel industry outlook for production and consumption in 2012 is unchanged. Distributors contend that any price growth in January is likely to be moderate.

Russian steelmakers downgraded transaction values for several steel products in December. The distribution chain has been unsettled due to low seasonal demand and the availability of cheaper CIS imports.

Indian distributors contend that the latest domestic price levels are not supported by market and economic fundamentals. Steelmakers without captive mining assets have begun to lobby the government to introduce iron ore export licenses. The foreign trade has been blamed for stifling domestic competition and lifting production costs. The Supreme Court\'s July ruling on iron ore mining activities in Bellary (Karnataka) remains in place.

Business activity in China is not expected to improve until after the Chinese New Year festival. The central bank\'s decision to reduce the deposit ratio for commercial banks by 0.5% is unlikely to yield any results until then. Distributors have reacted cautiously to the possible effect of the policy adjustment. Questions have been raised about whether it is sufficient to revitalize demand for finished steel and advance transaction values.

Ukrainian steel merchants intend to persevere with cautious procurement strategies in early 2012. Domestic steelmakers are operating, on average, at 60% of production capacity, following stagnant domestic and overseas demand.

Turkish steelmakers have struggled to adapt to the domestic trading environment. Underlying consumption of finished steel has fallen short of industry projections. End users are still waiting for evidence of price stability. Distributors allowed flat product stock levels to run down, in order to free working capital and minimize potential losses in a falling market.

The outlook for the United Arab Emirates’ steel market is unchanged. Price sentiment has continued to be unsettled by low import quotations and the deteriorating global economic climate. Construction activity has also stagnated. End-users intend to persist with tight inventory levels. Emirati rolling mills have responded with lower utilization rates.

The South African steel market has entered a period of low seasonal demand. Shipment volumes to downstream industries have deteriorated ahead of the shutdown period. Cape Gate and Scaw Metals Group are expected to adopt less aggressive pricing positions in the first quarter of 2012, following AMSA\'s decision to re-commission its Newcastle blast furnace.

Price volatility has undermined market sentiment in Mexico. Distributors contend that the latest transaction values are unsustainable.

(Source MEPS - Developing Markets Steel Review)
Posted By : admin on Tue, 20 Dec 2011
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