Developing Markets Steel Price Roundup From MEPS

Downstream demand in Brazil is expected to remain sluggish in the August/September period. Domestic buyers noted that the current initiative to lift prices is ill-timed, counterproductive and will only escalate import tonnages.

Challenging business conditions persist in the Russian Federation. Shipments to tube fabricators, OEMs and mechanical engineering companies have reduced more than expected. Overseas business is flat, due to weak European economies, a lack of demand from key customers in the Asian region and overcapacity in China.

Indian stockists are booking for immediate requirements only due to continuing price fluctuations. The monsoon season has deflated underlying demand.

The Chinese steel industry has struggled to adapt to the current domestic trading environment. In response to improving market conditions, a number of leading steelmakers have raised their official ex-works figures for August, eager to cover their input costs, and to recover losses accumulated this year.

In Turkey, the domestic steelmakers have been unable to apply any price improvements for finished steel products. Deliveries to downstream steel consuming industries have slowed, amid negative price expectations, weak post-Ramadan demand growth and political uncertainty. End-users intend to minimise large purchases until the situation improves.

The Emirati market is slow ahead of the summer months. Shipments to the construction sector and pipe fabricators are forecast to remain lacklustre in the short term. Transaction figures have fallen as local producers and foreign suppliers become more desperate to book business. The distribution network is in a 'wait and see' mode as a result.

Difficult trading conditions persist in South Africa. Anxious service centres are now striving to offload inventory at below cost to minimise potential losses and to ease working capital problems.

Price sentiment in Mexico has been unsettled by the domestic mills' "US dollar indexed" pricing strategies and weak economic fundamentals. Distributors condemned the latest upward adjustments as "unwarranted" given the current trading climate.

Source: MEPS