Synopsis: The world steel market over the period January 27 – February 3, 2011 | Предприниматель

Synopsis: The world steel market over the period January 27 – February 3, 2011

East Asian market took a two-week break to celebrate the Chinese New Year calendar. However, in other regions of the active metals plants remains high. Producers continue to raise prices to offset rising costs for raw materials. At the same time, demand, at least in the U.S. and Europe is high enough to justify these increases. However, resistance from customers gradually increased, so the market is already close to the peak of expansion, followed by a downward correction.


Activity in the Middle East market has fallen sharply blanks. Regional distributors, replenish semis in mid-January, stopped buying and are not ready to resume them because of the uncertain situation in the construction industry. Suppliers officially yet keep the old quote, but few transactions are carried out at lower prices. Thus, according to various sources, the cost of procurement of production of the CIS fell to $ 620-640 per ton FOB, Turkish companies are offering it at $ 650-660 per tonne FOB.

It is expected that in the coming weeks, prices continue to decline. Demand for stock in the Middle East will be restored not earlier than March, scrap prices have stabilized, and Asian companies temporarily left the market due to holidays. Turkish and Arab distributors willing to buy the Russian and Ukrainian billet at $ 610-615 per ton FOB, and Iranian companies have stopped the deal because of the decline in the domestic long products market.

In South-East Asia before the holidays quotes confidently walked up despite the lack of apparent demand. According to analysts, from mid-February around the region will rise in price due to reinforcement and wire rod recovery in the regional construction industry. Therefore, suppliers of semi-finished pre-set the stage for recovery. Cost of Taiwanese and Malaysian blanks, while noted in up to $ 700 per ton CFR, Russian products are offered at $ 680-690 per tonne CFR.

High growth rates were in late January, prices in the Asian market and slabs. Local distributors are faced with the strongest deficit semis. Brazilian and Australian products, apparently, does not appear in the region until April, and suppliers from the CIS successfully signed contracts with American and European buyers. As a result, the cost of the slabs in the Far East amounted to $ 700 per ton CFR, and new proposals after the holidays are expected to be at least $ 710-730 per tonne CFR.

Structural Steel

Depression in the Middle East long products market in late January-early February, has worsened. The Egyptian economy is paralyzed, banks stopped payments, does not operate Port of Alexandria, the local steelmakers stopped. Thus, the country, the former major buyer of accessories, for an indefinite period is out of the market. In this case, the riots in the near future may start in other Arab countries. According to experts, are at risk of Yemen, Syria and Algeria.

In this situation, the Arab governments do not approve new construction projects, and distribution companies do not provide stock products. Current needs are met, mainly due to locally made products. In early February, the domestic prices for rebar grew slightly in the UAE and Qatar, but in other countries in the quotes are stable, and Iran continues to decline. On top of that, because of the holidays is not functioning and the Southeast Asian market, although in mid-February there are expected some increase in prices.

Turkish rebar producers have to focus on the domestic market as well as the United States, where due to a sharp rise in price of long products in December and January, traders exhibit considerable interest in imports. The prices in this case, dropped to $ 680-695 per tonne FOB and, according to analysts, could fall further in the near future. Exporters from the CIS in January installed rebar export quotations in the range of $ 680-700 per ton FOB, and the rod – an average of $ 10 per ton higher, but in February they will obviously have to omit them for $ 20-30 per ton

In Europe, buyers expect lower prices in February for long products due to price reduction of scrap and therefore stopped buying. Meanwhile, the concessions so far have gone only plants in Southern Europe, have reduced production costs by about 10 euros per ton for both domestic and foreign buyers. Quotes of the fixtures in Italy are 530-540 euros per tonne EXW or 530 euros ($ 731) per tonne FOB for export to Algeria, the only more or less serious buyer of European products. Meanwhile, Eastern European companies still offer fittings to 570-580 euros per ton EXW, a German exhibit prices in March and 600 euros per ton EXW. According to analysts, these prices are too high and in the near future is likely to fall slightly.

steel plate

Before leaving on a two-week vacation East Asian companies have announced price increases, which will take effect immediately after the resumption of normal business activity. The cost of flat-rolled products is assumed to raise to $ 20-30 per ton, in particular, Chinese companies expect to bring in mid-February, prices for hot rolled coils to $ 730-750 per ton FOB, and the cold – to more than $ 850 per tonne FOB. Japanese Nippon Steel and JFE Steel pledged to increase internal quotations and declared intention to bring the cost of hot rolled steel for customers in Southeast Asia up to $ 780-800 per tonne CFR for delivery in March. Joined the process and Indian producers, has added about $ 50-80 per ton price of new c / c rolls as a result should exceed the $ 860 mark per ton EXW.

In principle, the demand for flat-rolled products in the region after the holiday break, really, should go up. Consumers and distributors need to replenish stocks, and the region’s economy is forecast in the spring revival. True, the problem may be excess supply caused by the expansion of steel production in China, Korea and Japan. Especially tough competition between local companies there in the market of shipbuilding of the plate, the cost of which may never exceed $ 800-820 per tonne CFR Korea.

Prices for the products of Russian and Ukrainian companies are consolidated. The cost of g / k roll for February was established in the range of $ 720-750 per ton FOB, at this level and is quoted Ukrainian commercial steel plate for Middle Eastern buyers. At the same time, suppliers of steel products in the region expect to further increase. In particular, the Gulf countries have recently received offers to sell hot-rolled more than $ 800 per tonne CFR.

Prevent steelmakers may lower demand for flat products in Middle Eastern countries, making a further rise of prices problematic. For example, in Turkey’s internal quotations for c / c rolls in late January has stabilized at $ 820-850 per ton EXW, and, traders expect to make concessions. Export prices are between $ 820-840 per tonne FOB for shipments to Europe, where the situation so far is in favor of steelmakers.

European distributors have not yet completed the process of formation of reserves, moreover, in the spring and are projected to increase in consumption of steel products. Therefore, the demand for flat-rolled products remains high, and prices rise. Most metals plants have already sold the March production and reception of orders announced in April. In this case, the value of g / k roll is supposed to bring to 620-640 euros ($ 856-883) per ton EXW. Russian products in the European market is now small, but the Ukrainian is offered at $ 760-790 per tonne DAP border of Ukraine. Analysts say that European companies exaggerate their ability to raise prices. As reported by traders, consumers are increasingly opposed to hot-rolled steel price increase of more than 600 euros per ton EXW.

Special steels

Asian stainless steel market was closed for the holidays, but in the last days before the New Year Taiwanese Tang Eng managed to make a statement about price increases – as long as only internal – about $ 100 per ton similar growth is expected in export quotations in the middle of February.

Prognosis for February looks optimistic. With the approach of spring should perk up demand, prices for stainless products increased, which will help producers offset higher prices of nickel next to a $ 27,500 per ton, however, to achieve sustained growth only when the producers will be able to continue a moderate policy, in Europe and the East Asian power in the output of stainless become redundant and are loaded with no more than 70-80%.


By early February, the activity in the world market fell to a minimum. Turkish companies, providing a raw material in February, stopped the transaction, and unclear situation in the Middle East market of long products has to be careful. Traders point to the price of HMS № 1 & 2 (80:20) at $ 485-500 per ton CFR, but these quotes are not supported by actual sales. However, the exporters themselves are not going to drop prices to below $ 480 per ton CFR, believing that by the end of February, they resume growth.

American companies have forecast that the domestic price of scrap in February to decrease by $ 10-15 per ton as compared to the previous month, however, as analysts note, the decline may be more significant – up to $ 30 per ton in the next two weeks, local consumers do not practical will have competition from exporters, and quotes on U.S. scrap market in the world just fell to $ 20-30 per tonne compared with peak values ​​in mid-January.

In Asia the market after the holidays, is expected to begin work with the same prices that were formed by the end of last month: about $ 460-480 per ton CFR in the supply HMS № 1 & 2 in containers up to $ 510 per tonne CFR for large parties. Indian companies, however, have reduced quote of $ 10-15 per ton, but it seems to be only temporary.

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